Triumph Financial is a “new fintech leader in payments” that the market is underappreciating, according to Loop Capital. The firm initiated coverage of Triumph with a buy rating and a price target of $76 per share. That target implies upside of 17.5% from Tuesday’s close. “Today we view the shares of TFIN as being graded like it’s an ordinary small bank as opposed [to] a highly profitable emerging fintech platform with highly profitable and defensible factoring operations that are currently funding startup losses in TriumphPay,” analyst Hal Goetsch wrote in a client note Thursday, noting the company is a “rare breakthrough.” Goetsch said the company could benefit from a fragmented U.S. trucking market in terms of payments, thanks to its expertise in transportation factoring — a way for truckers to receive payment for their services. This, along with its emerging open loop payment platform, TriumphPay, makes the company unique, according to Goetsch. TriumphPay connects brokers, factoring companies, and carriers in the trucking industry to facilitate payments. “By offering supply chain finance to brokers, it allows them to pay truckers faster. TriumphPay provides tools to increase automation, reduce fraud, and create back-office efficiency in a notoriously slow and labor-intensive process,” Goetsch said. To be sure, Goetsch believes the company will not become profitable until 2024, as freight demand slows in 2023. “We see the company as ‘underearning’ as it invests in TPAY and as the company laps very difficult comparisons through Q1- Q3 of 2023 versus the prior year as the shipping volumes moderate and invoice prices recede. We see TPAY moving from self- funding to generating EBITDA and EBIT in TPAY in late 2024, leading to a sizable swing in profitability and a normalization of invoice pricing,” he wrote. Triumph Financial shares rose 2.5% on Thursday and is up 32.35% since the start of 2023. Meanwhile, shares plunged more than 30% during the past 12 months. — CNBC’s Michael Bloom contributed reporting.
