One-glance verdict
Undervalued
$51.12 our estimate vs market $14.88
Wall Street consensus: $25.50 (-50.1% lower than our fair-value estimate)
71% below our estimate, below the bear case
Fundamentals snapshot
i3 Verticals, Inc.
IIIV · NMS · Technology · Software - Infrastructure
Current price
$14.88
52-week range
$14.17 - $33.97
Market cap
$517.57M
Balance sheet
Stretched
1.74x Concerning
Net debt $116.22M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 297.4% last year.
- Reward Returns 2.3% on equity, ahead of 80% of its peers.
- Risk Stock trades 101.4% above its 5-year average P/E.
- Risk Insider ownership is only 2.9% (peer median: 8.7%).
What this company does
i3 Verticals, Inc.
i3 Verticals sells specialized software that helps government groups like courts, schools, and police departments run their daily operations. The company earns most of its money from recurring revenue (predictable, ongoing payments) when these clients use its software and payment processing services. This is important because government organizations are typically very stable customers who rely on this software for essential tasks, creating a dependable business.
How the company got here
i3 Verticals was started in 2012 with a specific strategy: buy smaller companies that make specialized software for particular industries and then add in payment processing. This approach of growing through acquisitions (buying other companies) allowed it to expand into various fields. A key moment was in 2018 when it became a publicly traded company, which helped fund more purchases. Over time, the company has shifted its focus to concentrate on providing software and services primarily to government and public organizations.
What it actually does
Think of i3 Verticals as a company that provides the specialized software that government agencies and other public entities use to do their jobs. For example, they make the software that courts use to manage cases, that police departments use for records, and that schools use for managing lunch payments. A core part of their service is building payment processing directly into this software, making it easier for these organizations to collect fees and for people to pay for public services.
Public Sector
This is now the company's single main business area, making up the vast majority of its operations. i3 Verticals provides a wide range of software to state and local governments and related agencies. For example, its 'JusticeTech' software helps courts manage cases and evidence digitally. Other products help transportation departments manage vehicle registrations, utility companies handle billing, and public schools manage everything from lunch money to event tickets. Essentially, government entities pay i3 Verticals for these specialized software solutions to make their operations more efficient.
What management is betting on now
The company's main focus is to grow within the public sector market. After selling off other parts of its business, i3 Verticals is concentrating on selling more of its specialized software to government clients. A key part of this strategy is improving how its different software products work together, creating more unified platforms for its customers. They are also focused on increasing their recurring revenue (the predictable income from subscriptions and ongoing services), which provides more financial stability.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$14.61M
FY2025 Q1
$11.02M
FY2025 Q2
$-27.62M
FY2025 Q3
$6.81M
FY2025 Q4
$13.54M
FY2026 Q1
$13.81M
FY2026 Q2
$9.62M
FY2026 Q3
$12.95M
Revenue
$53.07M
Net income
$3.48M
Diluted EPS
0.18
Operating cash flow
$14.26M
Free cash flow
$12.95M
Fetching…
Sources
Revenue
$57.52M
Net income
$1.46M
Diluted EPS
0.07
Operating cash flow
$10.03M
Free cash flow
$9.62M
Fetching…
Sources
Revenue
$52.67M
Net income
$484.00K
Diluted EPS
0.02
Operating cash flow
$14.12M
Free cash flow
$13.81M
Fetching…
Sources
Revenue
$54.90M
Net income
$3.09M
Diluted EPS
0.14
Operating cash flow
$13.97M
Free cash flow
$13.54M
Fetching…
Sources
Revenue
$51.90M
Net income
$12.88M
Diluted EPS
0.50
Operating cash flow
$7.35M
Free cash flow
$6.81M
Fetching…
Sources
Revenue
$63.06M
Net income
$-154.00K
Diluted EPS
0.00
Operating cash flow
$-27.12M
Free cash flow
$-27.62M
Fetching…
Sources
Revenue
$61.69M
Net income
$2.06M
Diluted EPS
0.08
Operating cash flow
$11.49M
Free cash flow
$11.02M
Fetching…
Sources
Revenue
$60.86M
Net income
$117.91M
Diluted EPS
4.93
Operating cash flow
$15.14M
Free cash flow
$14.61M
Fetching…
Sources
Is it cheap or expensive?
Fair value $51.12 vs current price $14.88
Wall Street consensus is the average analyst price target: $25.50 (-50.1% lower than our fair-value estimate).
Our most-likely fair value is $51.12 a share — about 243.6% above today's price of $14.88, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $116.2M. Interest coverage 1.7x.
Net debt
$116.22M
Interest coverage
1.74x
i3 Verticals, Inc.'s profit covers its interest bill about 1.7 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
IIIV
BASELINE
i3 Verticals, Inc.
Total debt $118.87M Interest coverage 1.74x This is the baseline the peer rows are being compared against.
Total debt $74.48M Interest coverage 15.62x +795% vs IIIV Carries about 9.0x more debt cushion than IIIV.
Total debt $51.38M Interest coverage -18.01x -100% vs IIIV This peer has almost no interest-payment cushion compared with IIIV.
Total debt $187.05M Interest coverage 1.28x -26% vs IIIV Carries about 1.4x less debt cushion than IIIV.
What you should know
The case for and against IIIV
3 Rewards
2 Risks
Rewards
-
Revenue grew 297.4% last year.
-
Returns 2.3% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 101.4% above its 5-year average P/E.
-
Insider ownership is only 2.9% (peer median: 8.7%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
51.31x
Forward P/E
12.20x
P/B
0.97x
P/S
2.37x
EV/EBITDA
24.51x
PEG ratio
1.24x
Profitability
How much profit each dollar creates
Gross margin
68.5%
Operating margin
1.0%
Net margin
3.9%
ROE
2.3%
ROA
0.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.30x
Current ratio
1.21x
Quick ratio
0.97x
Total debt
$118.87M
Total cash
$2.65M
Growth
How the business has been compounding
Revenue TTM
$218.16M
Revenue 5Y CAGR
-29.6%
EPS TTM
0.29
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$52.38M
Free CF TTM
$3.75M
FCF margin
1.7%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—