Northland Securities Maintains Buy Rating for Repay Holdings with $12 Price Target

Northland Securities maintained a Buy rating for Repay Holdings (RPAY) with a price target of $12.00. The company's shares closed at $5.51. Analyst Michael Grondahl, a 5-star analyst with a 48.58% success rate, covered stocks such as Bitcoin Depot, WisdomTree, and Lendingtree. Repay Holdings reported a quarterly revenue of $75.63 million and a GAAP net loss of $102.25 million. Corporate insider activity showed positive sentiment with an increase in insiders buying shares.

Repay Holdings Corporation (RPAY) reported its Q2 2025 earnings, showcasing a mixed performance with notable improvements in key areas. The company highlighted its focus on reaccelerating growth, operational efficiency, and strategic investments in enterprise sales and customer support teams. Key financial highlights include:

- Revenue: $75.62 million, up 1% year-over-year.
- Adjusted EBITDA: $31.8 million, with a 42% margin.
- Adjusted net income: $19.1 million, $0.20 per share.
- Free cash flow: $22.6 million, with a 71% cash flow conversion.
- Cash on balance sheet: $163 million.
- Total liquidity: $413 million.

The company's earnings per share (EPS) of -$1.15 was a stark deviation from the forecasted $0.20, representing a negative surprise of 675%. Despite this, revenue slightly exceeded forecasts, with a 2.79% positive surprise. The stock of Repay Holdings closed the regular trading session with a 4.08% increase, reflecting some investor optimism. However, the after-hours session saw a decline of 1.75%, likely due to the EPS miss. The stock's current price is $5.06, compared to its 52-week high of $9.75 and low of $3.59, indicating ongoing volatility.

Looking forward, Repay Holdings expects sequential quarterly normalized gross profit growth, with projections of high single-digit to low double-digit growth in Q4. The company remains focused on capital allocation priorities, including organic growth and strategic mergers and acquisitions. CEO John Andrew Morris highlighted the company's core growth strategy, stating, "Repay's core growth strategy and resilient business model is built upon a never-ending commitment to optimizing payment flows to our clients." He also emphasized the momentum from prior enterprise sales initiatives and the growing network effect.

Significant EPS miss may impact investor confidence, and the decline in gross profit suggests margin pressures. Market volatility could affect stock price stability, and dependence on digital payment trends poses a risk if growth slows. Potential challenges in scaling operations and maintaining a competitive edge also exist.

Analyst Michael Grondahl of Northland Securities maintained a Buy rating for Repay Holdings with a price target of $12.00. The company's shares closed at $5.51. Corporate insider activity showed positive sentiment with an increase in insiders buying shares.

References:
[1] https://www.ainvest.com/news/repay-holdings-q2-2025-earnings-call-executing-growth-strategy-enterprise-sales-totalpay-adoption-2508-77/
[2] https://finance.yahoo.com/news/repay-holdings-rpay-q2-earnings-230008853.html