On Monday, KeyBanc reiterated a Sector Weight rating on shares of International Money Express (NASDAQ:IMXI), maintaining the firm value (FV) target at $18. The reiteration follows a series of virtual meetings held on September 5, 2024, with IMXI's CEO Bob Lisy and IR Coordinator Alex Sadowski, where a variety of topics were discussed, including current macroeconomic conditions and the company's strategic initiatives.
Investor discussions centered on International Money Express's investment in and the economics of its digital channel, as well as the secular trends affecting its retail operations.
The company's management addressed adjustments made in response to industry-level softness and the digital channel's approach to an inflection point. They aim to outpace market growth by 10-12% compared to the current low single-digit percentage, by focusing on digital expansion and revitalizing the retail channel.
International Money Express's management expressed confidence in growing adjusted EBITDA in the fiscal year 2025. The company's plan to drive expansion of its digital business with a healthy return on investment and a focus on shareholder return was highlighted as a positive step. KeyBanc noted that successful execution of the digital strategy, which aims to align more closely with market trends, could potentially lead to revenue growth in the medium to long term.
However, KeyBanc's analyst also pointed out the need for indicators of top-line health, particularly in the U.S./Mexico corridor, and evidence of a satisfactory level of operating profit in the emerging digital channel. Given that International Money Express currently has a significant presence in the retail channel, the firm will be looking for updates on the digital strategy and long-term targets in the upcoming quarters.
The Sector Weight rating suggests that KeyBanc views the stock as fairly valued at the current levels, with the firm value remaining unchanged at $18.
In other recent news, International Money Express has been the subject of significant developments. Breach Inlet Capital, an investment firm holding approximately 2% of the company's shares, has publicly urged the board of International Money Express to consider strategic alternatives, including a potential sale. The firm believes the company is undervalued and could benefit from a private equity takeout, allowing for more aggressive investment in growth opportunities.
In financial news, BMO Capital has adjusted its outlook on International Money Express, lowering the price target to $26.00 from the previous $30.00, while maintaining an Outperform rating on the stock. This adjustment comes after the company's second-quarter results, which prompted a revision of forward EPS estimates downwards by 6-18%.
On the earnings front, International Money Express reported record-breaking financial performance in the second quarter of 2024. Total revenue hit a record $171.5 million, largely driven by significant growth in its digital business. Adjusted EBITDA reached $31.1 million, marking an 18.1% margin, while earnings per share (EPS) stood at $0.42 and adjusted EPS at $0.55, reflecting a 10% year-over-year increase.
In other company news, International Money Express secured a significant financial agreement, a $425 million revolving credit facility. This new multi-currency credit line, which includes an uncommitted incremental facility for additional term and revolving loans up to $100 million, is set to mature on August 29, 2029.
The company used initial borrowings under this facility to repay the outstanding balance of its term loan and cover costs associated with establishing the new credit line.
InvestingPro Insights
International Money Express (NASDAQ:IMXI) has been navigating the financial landscape with a series of strategic maneuvers, as reflected in recent market data and analysis from InvestingPro. The company's management has been proactively buying back shares, signaling confidence in the business's value and potential for growth. This aligns with the company's focus on digital expansion and the revitalization of its retail channel, as discussed in the virtual meetings with CEO Bob Lisy and IR Coordinator Alex Sadowski.
InvestingPro Data shows a market capitalization of $598.68 million, with a P/E ratio of 10.77, suggesting the company is trading at a valuation that is reasonable relative to its earnings. Additionally, the adjusted P/E ratio for the last twelve months as of Q2 2024 stands at an even more attractive 9.87. The company's revenue growth of 9.26% during the same period indicates a solid upward trajectory, which is vital for investors looking for companies with the potential for sustained growth.
An InvestingPro Tip that stands out is the company's profitability over the last twelve months, which is an encouraging sign for investors seeking stable investments. Moreover, the analysts' prediction that the company will remain profitable this year provides a positive outlook for the company's financial health.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/IMXI. These tips offer insights into the company's financials, including the fact that International Money Express's liquid assets exceed its short-term obligations, providing a cushion against market volatility and financial stress.
In summary, the InvestingPro Insights suggest that International Money Express is positioned with a strategic focus on growth and shareholder return, backed by a solid financial foundation and market confidence as reflected in its share buyback program and profitability metrics.
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