Priority Technology (PRTH) seems like a compelling choice, having recently been elevated to a Zacks Rank #1 (Strong Buy). This change largely stems from an increasing pattern in earnings forecasts, which is among the key factors influencing share values.
The Zacks ranking depends exclusively on shifts in a company’s earnings outlook. It monitors EPS forecasts for both the present year and upcoming year from financial analysts who cover the stock using an average figure known as the Zacks Consensus Estimate.
Many individual investors struggle with making choices influenced by rating upgrades from Wall Street analysts, as these tend to be swayed more by subjective elements that can be difficult to observe and quantify instantly. Under such circumstances, the Zacks rating system proves useful due to its focus on evolving profit forecasts, which play a crucial role in predicting short-term shifts in stock prices.
Hence, the improvement in Priority Technology’s Zacks ranking primarily signifies optimism regarding its future profitability prospects, which might lead to increased purchasing activity and a rise in its share value.
Most Powerful Force Impacting Stock Prices
A shift in a firm’s prospective earning capabilities, evident through adjustments in profit forecasts, shows a robust connection with short-term fluctuations in share prices. Institutional investors play a significant role here since they rely heavily on earnings data and projections to determine the intrinsic worth of stocks. When analysts tweak these figures within their assessment tools, it directly impacts whether a stock appears overvalued or undervalued, prompting institutions either to purchase more shares or divest them. Such substantial transactions cause movements in the market price of those securities.
In essence, increasing earnings forecasts along with subsequent upgrades in ratings suggest a positive shift in Priority Technology’s core operations. This upward trajectory indicates better performance from the company itself. Consequently, investors ought to reflect this favorable change by driving the share price upwards.
Leveraging the Strength of Adjusted Earnings Estimates
Empirical studies indicate a significant link between fluctuations in earnings estimates and short-term stock performance. Therefore, monitoring these revisions can potentially lead to substantial gains when making investment choices. This is precisely why the well-established Zacks Rank stock-ranking model holds considerable importance, as it efficiently utilizes changes in earnings forecasts.
The Zacks Rank stock-ranking system categorizes stocks into five levels based on four criteria linked to profit forecasts, moving from Zacks Rank #1 (Strong Buy) down to Zacks Rank #5 (Strong Sell). This evaluation method boasts a commendable performance history confirmed by external audits; historically, shares holding a Zacks Rank #1 have delivered an average yearly gain of +25% starting from 1988. To view all the current Zacks #1 Rank (Strong Buy) equities for today, follow this link >>>>.
Earnings Estimate Revisions for Priority Technology
The projected earnings per share for this firm as of the end of the fiscal year in December 2025 stands at $1.06, marking an increase of approximately 107.8% compared to what was reported in the previous year.
Over the last three months, analysts have consistently raised their forecasts for Priority Technology. As a result, the Zacks Consensus Estimate for the firm has gone up by 39.5%.
Bottom Line
In contrast to the excessively upbeat Wall Street analysts who often skew their ratings towards positive outcomes, the Zacks rating system ensures an even split between ‘buy’ and ‘sell’ recommendations across all approximately 4000 stocks under coverage. Regardless of prevailing market trends, just the leading 5% receive a ‘Strong Buy’ designation, with another 15% earning a simple ‘Buy’. Consequently, being among the elite top 20% of the Zacks-analyzed stocks signifies strong upward revisions in profit forecasts, positioning these shares as prime contenders for outperforming the broader markets shortly.
You can find out more about the Zacks Rank at this link >>>
Upgrading Priority Technology to a Zacks Rank #1 places it among the top 5% of all Zacks-tracked stocks based on estimate revisions, suggesting that the share price could rise in the coming period.
The article was initially posted on Zacks Investment Research (Dailyexe).
