I3 Verticals (IIIV) AI Stock Analysis

• Market Cap: $642.14M
• Dividend Yield: N/A
• Average Volume (3M): 333.41K
• Price to Earnings (P/E): 125.2
• Beta (1Y): 0.74
• 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: 22,609,537
• 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: 136.31
• Enterprise Value/Market Cap: 0.65
• Enterprise Value/Revenue: 1.79
• Enterprise Value/Gross Profit: 2.82
• Enterprise Value/Ebitda: 9.73
• 1Y Price Target: $34.25
• Price Target Upside: 65.30% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: $21.00 ▲(1.35% Upside)

The score is held back mainly by elevated valuation (very high P/E) and weak technicals (below key moving averages with negative MACD). Financially, the company is safer due to a much stronger, low-leverage balance sheet, but this is tempered by softer recent operating momentum and weaker cash generation. Earnings-call commentary is moderately supportive due to recurring-revenue strategy and public-sector growth initiatives despite a cautious near-term outlook in select markets.

Positive Factors

Balance sheet strength

A materially de-levered balance sheet and sizable equity provide durable financial flexibility. Low leverage reduces refinancing and solvency risk, enables opportunistic M&A or buybacks, and supports multi-year investments in product and recurring-revenue transitions without urgent external funding needs.

Public-sector vertical specialization

Deepening footprint in mission-critical public-sector workflows creates sticky, contract-driven revenue. Long procurement cycles, high switching costs, and trust in regulated verticals support durable customer relationships and recurring platform adoption, aiding predictable long-term retention and cross-sell.

Strategic shift to recurring revenue

Moving contract mix from one-time professional services to SaaS and recurring fees improves revenue predictability and lifetime value. Over time this supports steadier cash flow, higher gross margin capture on software, and pricing power via modest annual increases (3–5%) that compound revenue durability.

Negative Factors

Recent revenue decline

A material year-over-year revenue decline signals demand or execution issues that can persist without corrective action. Shrinking top line reduces scale benefits, limits cross-sell leverage, and makes achieving the company's targeted high single-digit organic growth more challenging over the medium term.

Operating cash flow weakness

A sharp drop in operating cash flow erodes the company's internal funding capacity for M&A, product development, and buybacks. Persistent cash volatility raises concerns about working-capital management and the sustainability of investments needed to scale recurring revenue and support margin expansion.

Profitability and ROE erosion

A steep ROE decline indicates reduced capital efficiency and suggests prior earnings benefited from non-recurring items. Sustained lower returns can limit reinvestment capacity, weaken shareholder appeal, and imply management must materially improve operating margins or revenue mix to restore long-term profitability.

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 a clear positive (very low leverage and solid equity base), but operating momentum weakened with 2025 revenue turning negative and profitability/cash flow showing volatility (notably the sharp drop in operating cash flow versus 2024).

Income Statement

Revenue growth has turned negative in the most recent year (2025: -10.3%) after several years of expansion, signaling a near-term demand or mix headwind. Profitability is mixed: gross margin remains solid in 2025 (~55.7%) and EBITDA margin is healthy (~19.3%), but operating profitability is modest (EBIT margin ~6.2%). Net income improved versus prior loss years, yet 2024 showed an unusually high net profit margin (~49.3%) that did not repeat in 2025 (~8.4%), pointing to earnings volatility and potential non-recurring benefits in 2024.

Balance Sheet

The balance sheet has strengthened materially, with very low leverage in 2025 (debt-to-equity ~0.01) versus high leverage in 2021–2023 (debt-to-equity above 1.0 and peaking around ~1.69 in 2023). Equity is sizable (~$389.6M in 2025) and assets are stable, improving financial flexibility. A key watch item is that returns on equity have fallen sharply from 2024 (~29.8%) to 2025 (~4.6%), suggesting reduced profitability and/or a less efficient use of capital despite the improved capital structure.

Cash Flow

Cash generation weakened meaningfully in 2025, with operating cash flow down to ~$5.7M from ~$48.4M in 2024, reducing cash conversion and cushion. Free cash flow improved year-over-year in 2025 (growth ~59.8%) and matched net income (free cash flow to net income = 1.0), but the absolute level of cash flow is low relative to recent history. The sharp swing from strong 2024 cash flow to muted 2025 cash flow raises questions around working-capital volatility and consistency of cash earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	231.55M	213.16M	229.92M	189.68M	187.75M	224.12M
Gross Profit	146.85M	118.67M	211.35M	134.87M	174.92M	166.42M
EBITDA	42.61M	41.08M	33.23M	33.27M	22.59M	27.00M
Net Income	17.87M	17.87M	113.34M	-811.00K	-17.10M	-4.46M
Balance Sheet
Total Assets	638.41M	638.41M	730.67M	884.42M	770.31M	651.80M
Cash, Cash Equivalents and Short-Term Investments	66.67M	66.67M	86.54M	3.10M	3.49M	3.64M
Total Debt	4.79M	4.79M	36.05M	400.63M	305.58M	215.77M
Total Liabilities	120.69M	120.69M	215.32M	556.12M	462.62M	362.21M
Stockholders Equity	389.58M	389.58M	379.74M	236.75M	218.38M	204.76M
Cash Flow
Free Cash Flow	5.27M	5.69M	45.45M	18.13M	33.40M	38.57M
Operating Cash Flow	5.69M	5.69M	48.41M	34.50M	45.85M	46.77M
Investing Cash Flow	76.46M	76.46M	396.15M	-121.52M	-113.05M	-156.31M
Financing Cash Flow	-104.41M	-104.41M	-367.36M	75.65M	73.03M	102.10M

I3 Verticals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 20.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 20.72 is below the 20-day moving average (MA) of 24.45, below the 50-day MA of 24.74, and below the 200-day MA of 27.69, indicating a bearish trend. The MACD of -1.28 indicates Positive momentum. The RSI at 23.87 is Positive, neither overbought nor oversold. The STOCH value of 8.74 is Positive, 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
ATEN	69 Neutral	$1.26B	25.31	23.88%	1.33%	10.27%	3.52%
IMXI	68 Neutral	$460.94M	12.15	26.84%	―	-6.57%	-29.62%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
YEXT	56 Neutral	$611.91M	-437.72	16.74%	―	9.46%	―
IIIV	51 Neutral	$642.14M	125.20	0.58%	―	-23.69%	-95.61%
RPD	50 Neutral	$722.91M	31.90	37.09%	―	3.08%	-54.07%

I3 Verticals Corporate Events

I3 Verticals Director Resigns Amid Revenue Growth

On November 12, 2025, Burton Harvey resigned from i3 Verticals’ Board of Directors, effective November 14, 2025. The company reported a 7% increase in fourth-quarter revenue and an 11.5% increase for the full fiscal year 2025 compared to 2024. Despite a decrease in fourth-quarter net income, the company saw a positive turnaround in annual net income from a loss in the previous year. i3 Verticals is investing in new solutions for courts and utilities, highlighted by a new contract with the Supreme Court of Appeals of West Virginia. The company’s focus on recurring revenue and SaaS growth positions it for future expansion.

The most recent analyst rating on (IIIV) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on I3 Verticals stock, see the IIIV Stock Forecast page.