I3 Verticals (IIIV) AI Stock Analysis

• Market Cap: $831.08M
• Dividend Yield: N/A
• Average Volume (3M): 350.72K
• Price to Earnings (P/E): 5.3
• Beta (1Y): 0.72
• Revenue Growth: -35.88%
• EPS Growth: 4611.09%
• Country: US
• Employees: 1,480
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Infrastructure
• EPS (TTM): 0.32
• Shares Outstanding: 24,384,745
• 10 Day Avg. Volume: 442,688
• 30 Day Avg. Volume: 350,716
• PEG Ratio: -2.85
• Price to Book (P/B): 1.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.92K
• Enterprise Value/Market Cap: 0.78
• Enterprise Value/Revenue: 0.56
• Enterprise Value/Gross Profit: 3.42
• Enterprise Value/Ebitda: 3.08
• 1Y Price Target: $29.80
• Price Target Upside: 20.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 68 Neutral
• Price Target: $27.00 ▲(8.74%Upside)

I3 Verticals shows strong multi-year guidance with a focus on high-margin public sector growth, offset by declining revenue and operational cash flow. The stock appears undervalued with a low P/E ratio, but bearish technical indicators suggest cautious optimism.

Positive Factors

Earnings Performance

I3 Verticals posted adjusted earnings per share that outpaced the consensus.

Mergers and Acquisitions

Announced acquisition of a utility billing software company, while M&A pipeline continues to be robust.

Strategic Focus

The sale of the healthcare revenue cycle management business to Infinx allows i3 Verticals to focus solely on its faster-growing, higher-margin Public Sector vertical.

Negative Factors

Financial Guidance

Revenue and adjusted EBITDA estimates for FY25 are being reduced to reflect the impact of the healthcare business divestiture.

Market Perception

Despite consistent execution from IIIV, the share price is unchanged over the last five years, indicating a lack of clear catalyst for a re-rating.

Revenue Miss

I3 Verticals reported a modest revenue miss versus the consensus estimate.

I3 Verticals Business Overview & Revenue Model

Company Description

i3 Verticals, Inc. (NASDAQ: IIIV) is a technology and integrated payments provider that delivers seamless payment and software solutions to a variety of sectors, including education, healthcare, public sector, and non-profits. The company focuses on delivering tailored solutions that streamline operations and enhance efficiency for its clients through a combination of proprietary software and robust payment processing services.

How the Company Makes Money

i3 Verticals makes money primarily through transaction fees generated from its payment processing services, which enable businesses to accept electronic payments from their customers. Additionally, the company earns revenue from the sale and licensing of its proprietary software solutions, which are designed to meet the specific needs of the sectors it serves. Key revenue streams include transaction-based revenue from payment processing, subscription fees from software-as-a-service (SaaS) offerings, and professional services fees for implementation and support. Strategic partnerships with financial institutions and technology providers also play a significant role in expanding its market reach and enhancing its product offerings.

I3 Verticals Financial Statement Overview

Summary

The company exhibits strong profitability margins with a high gross profit margin and improved net profit margin. However, declining revenue and cash flow indicate challenges in growth and liquidity. The balance sheet shows low leverage and a strong equity base, although asset shrinkage is a concern.

Income Statement

The company shows a strong gross profit margin of 78.1% TTM, indicating efficient cost management relative to revenue. Net profit margin improved to 46.5% TTM, reflecting significant net income gains. However, revenue has declined from $370.2 million in 2023 to $241.7 million TTM, indicating a negative growth trajectory. EBIT and EBITDA margins of 3.9% and 17.9% respectively suggest moderate profitability.

Balance Sheet

The debt-to-equity ratio is 0.11 TTM, showing low leverage and financial stability. Return on equity (ROE) stands at 29.1% TTM, indicating effective use of equity to generate profits. The equity ratio of 59.6% TTM suggests a strong equity base. However, the reduction in total assets from $881.5 million in 2023 to $646.4 million TTM indicates potential asset shrinkage.

Cash Flow

Operating cash flow has decreased from $34.5 million in 2023 to $7.6 million TTM, signaling declining operational efficiency. Free cash flow has also dropped significantly from $18.1 million in 2023 to $318,000 TTM, reflecting limited cash available after capital expenditures. The operating cash flow to net income ratio is 0.07 TTM, suggesting limited cash coverage of net income.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
241.65M	229.92M	370.24M	317.86M	224.12M	150.13M
	Gross Profit
188.68M	211.35M	289.69M	244.50M	166.42M	102.90M
	EBIT
9.55M	6.85M	22.71M	20.29M	9.72M	3.74M
	EBITDA
43.32M	47.69M	57.73M	30.91M	30.20M	23.37M
	Net Income Common Stockholders
112.27M	113.34M	-811.00K	-23.22M	-7.84M	-979.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.75M	86.54M	3.11M	3.49M	3.64M	15.57M
	Total Assets
646.36M	730.67M	881.49M	770.31M	651.80M	403.53M
	Total Debt
41.59M	36.05M	400.02M	305.58M	215.77M	90.76M
	Net Debt
33.84M	-50.50M	396.91M	302.09M	212.13M	75.19M
	Total Liabilities
132.70M	215.32M	553.20M	462.62M	362.21M	163.36M
	Stockholders Equity
385.17M	379.74M	236.75M	218.38M	204.76M	155.58M
Cash Flow		Free Cash Flow
318.00K	48.41M	18.13M	33.40M	38.57M	17.77M
	Operating Cash Flow
7.63M	48.41M	34.50M	45.85M	46.77M	23.72M
	Investing Cash Flow
404.84M	396.15M	-121.52M	-113.05M	-156.31M	-35.43M
	Financing Cash Flow
-349.48M	-367.36M	75.65M	73.03M	102.10M	29.11M

I3 Verticals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.83
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IIIV, the sentiment is Negative. The current price of 24.83 is below the 20-day moving average (MA) of 25.26, below the 50-day MA of 25.06, and above the 200-day MA of 24.15, indicating a neutral trend. The MACD of -0.17 indicates Positive momentum. The RSI at 47.22 is Neutral, neither overbought nor oversold. The STOCH value of 61.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IIIV.

I3 Verticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VRNT	75 Outperform	$1.10B	24.18	5.32%	―	-2.09%	76.96%
ATEN	74 Outperform	$1.27B	26.72	24.36%	1.35%	4.90%	9.91%
RDWR	72 Outperform	$1.02B	90.65	3.78%	―	9.54%	―
IIIV	68 Neutral	$831.08M	5.34	0.63%	―	-35.88%	4611.09%
BASE	64 Neutral	$1.00B	―	-55.90%	―	12.76%	16.97%
Sector *	62 Neutral	$11.72B	10.43	-7.10%	2.91%	7.41%	-7.94%
DAVA	60 Neutral	$926.79M	42.23	2.85%	―	7.58%	-57.13%

I3 Verticals Corporate Events

I3 Verticals Reports Q2 Revenue Growth and Acquisition

i3 Verticals reported an 8.8% increase in second-quarter revenue for 2025, reaching $63.1 million, and a net income of $1.1 million, reversing a loss from the previous year. The company completed the acquisition of a utility billing software company and divested its Healthcare Revenue Cycle Management business, aiming to focus on expanding its enterprise software offerings in the public sector.

i3 Verticals Sells Healthcare Division to Infinx

On May 5, 2025, i3 Verticals, LLC, a subsidiary of i3 Verticals, Inc., completed the sale of its healthcare revenue cycle management business to Infinx, Inc. for $96 million in cash. This divestiture allows i3 Verticals to focus on its core operations in the Public Sector, particularly in the K-12 education market, while Infinx enhances its AI-driven solutions with the acquired expertise and technology.