General Atlantic (AL), L.P. has reported a significant divestment in Alkami Technology, Inc. (NASDAQ:ALKT), according to a recent SEC filing. The firm sold 2.5 million shares of Alkami Technology in a registered block trade, netting approximately $93.75 million. The shares were sold at a price of $37.50 each.
Following this transaction, General Atlantic retains ownership of 13,055,049 shares in Alkami Technology. This sale is part of a broader strategy by the investment group, which holds various interests in Alkami through multiple affiliated entities. The transaction was completed on November 8, 2024, and reflects General Atlantic's ongoing portfolio management activities.
In other recent news, Alkami Technology, Inc. launched a secondary offering of 7.5 million shares with entities affiliated with General Atlantic, S3 Ventures, George B. Kaiser, and Brian R. Smith. The company, which is not selling any shares or receiving any proceeds, also plans to grant the underwriter, J.P. Morgan Securities LLC, a 30-day option to buy up to an additional 1,125,000 shares. Meanwhile, Alkami Technology reported a strong Q3 financial performance, demonstrating a 27% increase in revenue to $85.9 million and an adjusted EBITDA of $8.3 million, both exceeding expectations. Following these recent developments, KeyBanc Capital Markets raised its price target for Alkami Technology to $45 while maintaining an Overweight rating. The company also reported nine new digital banking wins and secured 14 renewals, indicating a strong demand for its services. Despite a favorable environment for mergers and acquisitions, Alkami has not made any recent acquisitions. However, the company's data technology is increasingly seen as a market differentiator, with over 70% of new client wins in 2024 incorporating data and marketing products. Looking ahead, Alkami Technology forecasts Q4 2024 revenue between $89 million and $90 million, with full-year guidance of $333.2 million to $334.2 million.
InvestingPro Insights
General Atlantic's decision to divest a portion of its holdings in Alkami Technology comes at a time when the company's stock has shown remarkable performance. According to InvestingPro data, Alkami has delivered a strong 76.61% return over the past year, with a particularly impressive 42.12% gain in the last six months. This upward momentum is further evidenced by the stock trading at 91.56% of its 52-week high, suggesting investor confidence in the company's prospects.
Despite the positive market sentiment, it's worth noting that Alkami is currently trading at high valuation multiples. InvestingPro Tips indicate that the company is trading at a high revenue valuation multiple and a high Price / Book multiple of 11.24. This could explain General Atlantic's decision to capitalize on the stock's recent gains.
Interestingly, while Alkami has not been profitable over the last twelve months, with an operating income margin of -15.48%, analysts are optimistic about its future. An InvestingPro Tip reveals that analysts predict the company will be profitable this year. This optimism is supported by the company's strong revenue growth, which stands at 26.73% for the last twelve months.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Alkami Technology, providing deeper insights into the company's financial health and market position.
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