On Monday, BMO Capital Markets adjusted its outlook for International Money Express (NASDAQ:IMXI) shares, a leading remittance services provider, by increasing the price target to $30.00 from the previous $27.00. The firm reiterated its Outperform rating.
The revision comes after International Money Express reported its third-quarter results, which showed robust performance in its retail operations and significant growth in its digital segment. Despite the retail remittance market facing challenges due to macroeconomic factors and a shift towards digital services, the company managed to outperform in this area.
International Money Express also announced a strategic review aimed at enhancing shareholder value. BMO Capital Markets highlighted that the market might be underestimating International Money Express's consistent market-share gains and its compounded earnings per share (EPS) growth.
Amidst these developments, International Money Express has continued to aggressively buy back its shares, with a buyback yield of over 10%. Based on these factors, BMO Capital has raised its out-year estimates by 3-4%, leading to the new price target of $30.00.
The company's strategic initiatives and solid quarterly performance appear to be driving positive sentiment from BMO Capital Markets, suggesting a favorable outlook for International Money Express in the eyes of the firm.
In other recent news, International Money Express, also known as Intermex, has reported robust financial results for the third quarter of 2024. The company's GAAP EPS rose to $0.53, a 29.3% increase year-over-year, while its adjusted EBITDA reached a record high of $33.9 million, marking a 7% rise. Intermex's digital revenue significantly grew by over 66% year-over-year, contributing to a total revenue of $171.9 million for the quarter.
The company is also currently undergoing a strategic review process, which may potentially lead to a private sale, with FT Partners acting as the financial advisor. While the retail market is projected to decline, Intermex continues to outperform with growth rates in the 60s for both retail and digital segments.
Despite an increase in interest expenses to $3.2 million due to refinancing, the company is focusing on enhancing its retail strategy and increasing operational efficiency. These are recent developments and are part of the company's broader aim to balance retail and digital operations while focusing on profitability and digital investments.
InvestingPro Insights
Recent data from InvestingPro adds depth to BMO Capital Markets' positive outlook on International Money Express (NASDAQ:IMXI). The company's market cap stands at $643.74 million, with a P/E ratio of 11.53, indicating a potentially undervalued stock relative to its earnings. This aligns with an InvestingPro Tip highlighting that IMXI is trading at a low P/E ratio relative to its near-term earnings growth, supporting BMO's view of market underestimation.
The company's financial health appears robust, with revenue of $665.67 million in the last twelve months as of Q3 2024, and an impressive operating income margin of 15.14%. These figures underscore IMXI's strong market position and operational efficiency, factors likely contributing to BMO's optimistic stance.
InvestingPro Tips also reveal that management has been aggressively buying back shares, corroborating the article's mention of a high buyback yield. Additionally, the stock has shown significant returns over the last week, month, and three months, with increases of 18.35%, 17.28%, and 23.88% respectively. These trends suggest growing investor confidence, potentially driven by the company's strategic review and market performance.
For investors seeking a deeper analysis, InvestingPro offers 12 additional tips for IMXI, providing a comprehensive view of the company's prospects and market position.
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