On Monday, BTIG initiated coverage on International Money Express (NASDAQ:IMXI), a leading provider of money transfer services, with a Buy rating and a price target of $25.00. The firm highlighted the company's expansion efforts and its focus on the Latin America and Caribbean (LACA) region, as well as its foray into European markets and a growing digital remittance option.
International Money Express is expanding its market share in the LACA corridors and is entering new send-markets in Europe. BTIG noted the company's strategic moves to adapt to potential shifts in consumer preferences from in-person to digital transactions. Despite the forecast of modest revenue growth for fiscal year 2024, estimated at approximately 4% organically, the firm is optimistic about the company's ability to re-accelerate growth when macroeconomic trends become more favorable.
The company's management has a track record of successfully navigating through challenging economic conditions. BTIG also pointed out that while the industry-wide remittance trends to Mexico, International Money Express's largest market, have slowed, the company's management is taking appropriate steps to position the company for growth.
International Money Express is leveraging its strong free cash flow generation, approximately a 9% free cash flow yield, to buy back shares. This strategy is expected to be a significant contributor to the company's projected 14% growth in adjusted earnings per share (EPS) for fiscal year 2024.
BTIG's Buy rating and $25 price target for International Money Express are based on a valuation of around 9 times the company's forecasted adjusted EPS for fiscal year 2025. This valuation takes into account the expected rolling out of the fiscal year 2024 price-to-earnings (P/E) to a higher estimate in the next fiscal year.
InvestingPro Insights
As International Money Express (NASDAQ:IMXI) continues to navigate the remittance industry with strategic growth initiatives, real-time data from InvestingPro provides a deeper financial perspective. The company's market capitalization stands at $680.87 million, with a forward-looking P/E ratio of 11.15, which indicates a potential undervaluation relative to near-term earnings growth. Furthermore, with a PEG ratio of 0.92 for the last twelve months as of Q1 2024, it suggests that the company's earnings growth may not be fully reflected in its current share price.
InvestingPro Tips highlight that International Money Express's liquid assets exceed its short-term obligations, which could provide financial flexibility in uncertain economic times. Additionally, two analysts have revised their earnings upwards for the upcoming period, signaling confidence in the company's performance prospects. It's also worth noting that while International Money Express does not pay a dividend, its management has been focusing on share buybacks, which can be a boon for investors as it may indicate a belief in the company's value by its leadership.
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