Monness analyst Gustavo Gala has reiterated their neutral stance on IMXI stock, giving a Hold rating yesterday.
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Gustavo Gala has given his Hold rating due to a combination of factors impacting International Money Express. The company is undergoing a costly transition to bridge its digital gap, which involves significant investments in digital marketing and headcount to drive sales and marketing efforts. Despite these efforts, the revenue, EBITDA, and EPS projections for the coming years have fallen short of consensus expectations, partly due to an additional $8 million in digital marketing expenses.
Furthermore, while management has set ambitious long-term growth targets, achieving these will require exceptional execution in both digital and retail operations, as well as improvements in the end market performance, which remain uncertain given the current economic conditions. The company’s focus on digital customer acquisition has resulted in flat revenue growth and margin pressures, with the investment in digital marketing being relatively small compared to larger peers. Additionally, challenges in retail operations, such as underinvestment in agent productivity and expansion in Western states, need to be addressed to unlock further growth potential. These factors contribute to the Hold rating as the company navigates its strategic initiatives and market dynamics.
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