YB new stock pitches (Fri, Dec 27)

Priority Technology Holdings (PRTH) is a unified commerce platform for payments, banking, and vendor management, ranking as the 5th largest non-bank merchant acquirer in the US. Despite $800M in debt, proactive management and strong growth present an opportunity, with 2024 estimates projecting 16% revenue growth and 20% EBITDA growth. PRTH serves SMBs, B2B payables, and enterprise BaaS markets, leveraging partnerships with financial giants like Mastercard and Citibank. The company is expanding in B2B payables and embedded finance, with emerging opportunities in real estate, construction, payroll, and BaaS. Management is addressing debt through preferred stock redemption and a potential equity raise. Valuation comparisons to peers suggest over 100% upside potential by 2025, based on EV/EBITDA, EV/Sales, and P/E multiples. Risks include the debt burden, economic sensitivity, competitive pressure, and potential dilution from equity raises. The company's growth trajectory and ability to solve inefficiencies in multi-trillion dollar markets make it a high-upside fintech investment opportunity.

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Galaxy Gaming (GLXZ), a provider of casino table games and iGaming content, is set to be acquired by Evolution at $3.20/share by mid-2025, offering a 17% upside from the current price of $2.73. The company boasts high-quality recurring revenue with 90% gross margins and trades at 4.5x 2025 EBITDA. GLXZ projects a 10.7% CAGR in EBITDA to 2029. The business is divided into GG Core (68% of revenue) and GG Digital (32%). Risks include regulatory hurdles for the acquisition, debt management ($53.8M long-term debt with 13% interest rate), and potential failure to meet projections. A new CFO with M&A and debt restructuring experience has been appointed. If the acquisition falls through, GLXZ receives a $5.2M breakup fee. The company holds $17.9M in cash, which management views as insurance against debt default. Evolution's acquisition price values GLXZ at 5.2x 2025 EBITDA, which appears attractive for an asset-light, growing business.

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Raymond James has upgraded EverQuote, Inc. (EVER) to Strong Buy with a price target of $35. Despite solid year-to-date results, the stock has underperformed due to concerns about an upcoming FCC rule change in January 2025, which will affect consent collection for outbound calls and impact about 30% of the company's business. However, the analyst expects lead demand to surge post-2025 as insurance companies increase advertising budgets to maintain market share. Currently, EVER is trading below its peers on 2025 estimated P/E and EV/Revenue ratios, and at a 16% discount to its 200-day moving average, compared to a 4% premium for peers. This valuation, combined with the expected increase in demand, supports the Strong Buy rating.

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