I3 Verticals (IIIV) AI Stock Analysis

• Market Cap: $684.18M
• Dividend Yield: N/A
• Average Volume (3M): 333.41K
• Price to Earnings (P/E): 219.2
• Beta (1Y): 0.72
• Revenue Growth: -23.69%
• EPS Growth: -95.61%
• Country: US
• Employees: 1,480
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.26
• Shares Outstanding: 22,094,170
• 10 Day Avg. Volume: 386,400
• 30 Day Avg. Volume: 333,408
• PEG Ratio: -0.41
• Price to Book (P/B): 1.99
• Price to Sales (P/S): 3.64
• P/FCF Ratio: 206.81
• Enterprise Value/Market Cap: 0.77
• Enterprise Value/Revenue: 2.36
• Enterprise Value/Gross Profit: 3.90
• Enterprise Value/Ebitda: 13.29
• 1Y Price Target: $30.50
• Price Target Upside: 35.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.12
• Revenue Forecast (FY): $227.80M

• Rating: 60 Neutral
• Price Target: $23.50 ▲(4.68% Upside)
• Action: Reiterated Date: 03/04/26
• Date: Action: Reiterated 03/04/26

The score is supported most by improving fundamentals and balance sheet strength (low leverage, positive free cash flow) and a generally positive FY26 outlook driven by recurring revenue/ARR and strong SaaS growth. Offsetting this are weak technical trends (below key moving averages with negative MACD) and a demanding valuation (very high P/E) alongside near-term margin pressure and acquisition multiple risk.

Positive Factors

Recurring revenue / ARR growth

A high and growing recurring revenue base and rising ARR materially improve revenue predictability and cash flow stability. With 80% recurring mix and ARR expansion, the business can better plan investments, retain customers via integrated workflows, and drive long-term margin leverage from subscription economics.

SaaS revenue acceleration

Sustained >20% SaaS growth signals durable product-market fit in targeted verticals and rising revenue quality. Faster SaaS mix boosts recurring revenue, typically yields higher gross margins than services, and strengthens cross-sell opportunities that support multi-year ARR expansion and superior lifetime customer economics.

Balance sheet strength and cash generation

Low leverage, positive free cash flow and a cash buffer provide financial flexibility for acquisitions, product investment and buybacks without immediate refinancing risk. Strong balance-sheet positioning underpins disciplined capital allocation and resilience through cyclical variability in payments and services volumes.

Negative Factors

Revenue volatility and thin operating margins

A recent decline in TTM revenue and low operating margins indicate earnings sensitivity to mix shifts and cost swings. Persistent margin thinness limits reinvestment capacity and makes long-term profitability reliant on sustained SaaS mix gains and effective cost control across hosting and R&D investments.

Near-term margin pressure from investments and lower services

Deliberate investments, rising hosting costs and falling nonrecurring professional services reduce near-term EBITDA and compress margins. If these trends persist or investments take longer to monetize, margin recovery could be delayed, stressing free cash flow conversion and operational scalability over multiple quarters.

High acquisition multiple and integration risk

Paying ~15x EBITDA for an acquisition raises execution and capital-return risk versus historical targets. Higher multiples demand stronger organic growth and integration execution to justify the price, and missteps could pressure returns, leverage covenants under the revolver, and future M&A discipline.

I3 Verticals Business Overview & Revenue Model

Company Description

i3 Verticals, Inc. provides integrated payment and software solutions to small- and medium-sized businesses and organizations in education, non-profit, public sector, and healthcare markets in the United States. It operates in two segments, Merchant Services, and Proprietary Software and Payments. The company offers payment processing services that enables clients to accept electronic payments, facilitating the exchange of funds and transaction data between clients, financial institutions, and payment networks. The company also licenses software; and provides ongoing support, and other point of sale-related solutions. It offers its solutions to clients through direct sales force; distribution partners, including independent software vendors, value-added resellers, and independent sales organizations; and referral partners, such as financial institutions, trade associations, chambers of commerce, and card issuers. The company was founded in 2012 and is headquartered in Nashville, Tennessee.

How the Company Makes Money

I3 Verticals generates revenue primarily through its payment processing services, which involve charging fees for each transaction processed through its platform. The company earns money from a mix of fixed and variable fees, including transaction fees, monthly service fees, and setup fees. Additionally, I3 Verticals offers software solutions that provide recurring revenue through subscription models. Key partnerships with financial institutions, technology providers, and industry-specific software companies enhance its revenue streams by broadening its client base and integrating its services into existing systems. The company's focus on specific vertical markets allows it to capture niche segments, further contributing to its earnings through specialized offerings tailored to the unique needs of those industries.

I3 Verticals Financial Statement Overview

Summary

Balance sheet strength is the main support (low TTM debt-to-equity ~0.10; sizable equity base), but operating performance is mixed: TTM revenue declined (-3.9%) and operating margin is thin (~4.7%) despite solid gross margin (~60%). Cash flow is positive (TTM FCF ~$10.8M; FCF > net income), though year-to-year conversion has been uneven.

Income Statement

TTM (Trailing-Twelve-Months) revenue declined (-3.9%) and profitability looks pressured at the operating line (EBIT margin ~4.7%), but the company remains profitable (net margin ~7.3%) with solid gross profitability (~60%). Results have been volatile across annual periods—2023 showed a small net loss while 2024 posted unusually high net income and margins—so overall earnings quality/consistency is a key watch item despite the recent return to positive profits.

Balance Sheet

Leverage has improved meaningfully versus earlier years: debt-to-equity is low in TTM (~0.10) and equity is sizable (~$359M) relative to the asset base (~$596M). That said, the capital structure was much more levered in 2021–2023 (debt-to-equity above 1.0 and as high as ~1.69), highlighting that the balance sheet has a history of higher leverage even though current positioning is stronger.

Cash Flow

Cash generation is mixed. TTM (Trailing-Twelve-Months) free cash flow is positive (~$10.8M) and notably exceeds net income (free cash flow to net income ~1.30), which is a constructive sign. However, operating cash flow is modest (~$8.3M) and cash conversion has been inconsistent year-to-year, with a sharp step down from the very strong 2024 operating and free cash flow levels.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	222.53M	213.16M	229.92M	189.68M	187.75M	224.12M
Gross Profit	134.41M	118.67M	211.35M	134.87M	174.92M	166.42M
EBITDA	39.44M	41.08M	33.23M	33.27M	22.59M	27.00M
Net Income	16.30M	17.87M	113.34M	-811.00K	-17.10M	-4.46M
Balance Sheet
Total Assets	595.93M	638.41M	730.67M	884.42M	770.31M	651.80M
Cash, Cash Equivalents and Short-Term Investments	37.52M	66.67M	86.54M	3.10M	3.49M	3.64M
Total Debt	7.39M	7.75M	38.31M	400.63M	305.58M	215.77M
Total Liabilities	112.59M	120.69M	215.32M	556.12M	462.62M	362.21M
Stockholders Equity	358.51M	389.58M	379.74M	236.75M	218.38M	204.76M
Cash Flow
Free Cash Flow	10.46M	3.75M	45.45M	20.80M	33.40M	38.57M
Operating Cash Flow	8.32M	5.69M	48.41M	37.17M	45.85M	46.77M
Investing Cash Flow	76.04M	76.46M	396.15M	-121.52M	-113.05M	-156.31M
Financing Cash Flow	-134.40M	-104.41M	-367.36M	72.98M	73.03M	102.10M

I3 Verticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IIIV, the sentiment is Positive. The current price of 22.45 is above the 20-day moving average (MA) of 21.74, below the 50-day MA of 23.99, and below the 200-day MA of 27.38, indicating a neutral trend. The MACD of -0.38 indicates Negative momentum. The RSI at 49.07 is Neutral, neither overbought nor oversold. The STOCH value of 77.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IIIV.

I3 Verticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATEN	70 Outperform	$1.42B	33.64	19.01%	1.33%	10.27%	3.52%
IMXI	68 Neutral	$469.26M	12.37	26.84%	―	-6.57%	-29.62%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IIIV	60 Neutral	$684.18M	219.24	0.58%	―	-23.69%	-95.61%
YEXT	55 Neutral	$689.65M	―	16.74%	―	9.46%	―
RPD	49 Neutral	$412.49M	17.41	27.12%	―	3.08%	-54.07%

I3 Verticals Corporate Events

i3 Verticals Shareholders Back Board, Pay and Auditor

At its 2026 Annual Meeting of Stockholders held on March 3, 2026, i3 Verticals reported that 28,382,815 shares, or about 91.6% of its outstanding common stock, were represented in person or by proxy, ensuring a strong quorum for decision-making. Shareholders elected eight directors, including Gregory Daily and Clay Whitson, to one-year terms, ratified Deloitte & Touche LLP as independent auditors for fiscal 2026, and approved on an advisory basis the compensation of the company’s named executive officers.

These voting outcomes signal continued shareholder support for i3 Verticals’ current leadership, governance structure, and executive pay practices, which may contribute to management stability and confidence in the company’s strategic direction. The ratification of the external auditor also reinforces oversight of the firm’s financial reporting, which is important for investors and other stakeholders monitoring its performance in the fintech market.

The most recent analyst rating on (IIIV) stock is a Hold with a $22.00 price target. To see the full list of analyst forecasts on I3 Verticals stock, see the IIIV Stock Forecast page.

i3 Verticals boosts outlook after acquisition and buyback

For its fiscal first quarter ended December 31, 2025, i3 Verticals reported modest top-line growth, with revenue from continuing operations rising 0.9% year on year to $52.7 million, while profitability softened as net income from continuing operations declined to $1.1 million and adjusted EBITDA fell to $13.6 million, or 25.8% of revenue. Recurring revenue remained a bright spot, with annualized recurring revenue climbing 8.4% to $169.6 million and SaaS revenue growing 24%, underscoring the company’s strategic shift toward subscription and transaction-based models. Effective January 1, 2026, i3 Verticals completed the $60 million cash acquisition of a driver and motor vehicle insurance verification software provider, with up to $20 million in contingent consideration, bolstering its transportation-market footprint with a business management describes as having a strong competitive moat and perfect customer retention. The company’s board also authorized a new share repurchase program for up to $60 million of Class A common stock to replace an exhausted prior authorization, providing additional capital-return flexibility through early 2027 while remaining subject to market conditions and credit facility constraints. Reflecting these moves and first-quarter performance, i3 Verticals slightly raised its full-year 2026 outlook for revenue and adjusted EBITDA and tightened its adjusted EPS range, signaling confidence in the earnings contribution from its higher-margin, recurring software strategy and recent acquisition.

The most recent analyst rating on (IIIV) stock is a Hold with a $21.00 price target. To see the full list of analyst forecasts on I3 Verticals stock, see the IIIV Stock Forecast page.