Alkami stock price target cut to $45 by KeyBanc

On Friday, KeyBanc Capital Markets made an adjustment to Alkami Technology Inc’s (NASDAQ:ALKT) financial outlook. Currently trading at $30.46 with a market capitalization of $3.05 billion, the company has seen its stock decline over 21% year-to-date, according to InvestingPro data. Alex Markgraff, an analyst at KeyBanc, revised the price target downward to $45.00 from the previous $50.00 while maintaining an Overweight rating on the company’s shares. The adjustment follows Alkami’s fourth-quarter 2024 revenue report, which matched expectations, but showed a slight deceleration in Annual Recurring Revenue (ARR) growth.

Markgraff noted Alkami’s adjusted EBITDA continued to outperform, and the company has announced its intention to acquire MANTL, a provider of omnichannel account opening solutions. The acquisition is seen as a strategic move to complete Alkami’s product offerings and is expected to enhance the company’s ability to secure new banking clients, driving revenue synergies crucial to Alkami’s growth strategy.

The fiscal year 2025 guidance for organic revenue from Alkami was slightly below analyst expectations, with adjusted EBITDA margins aligning more closely. The inclusion of MANTL is projected to lead to increased scrutiny of the FY25 implied guidance, particularly regarding the ability to cross-sell and renew contracts. Markgraff has adjusted his FY25 revenue estimates upwards to account for the MANTL acquisition, although this change results in a reduction of organic revenue growth projections.

For fiscal year 2026, the analyst anticipates revenue to rise due to the MANTL acquisition, with the expectation that it will be accretive to the adjusted EBITDA. Despite the acquisition’s dilutive effect on mergers and acquisitions, KeyBanc maintains a positive outlook on Alkami’s stock, with analyst targets ranging from $39 to $54. The firm’s analysis suggests that the potential for bank opportunity and Revenue Per User (RPU) expansion post-MANTL acquisition should proceed without significantly disrupting the company’s margin trajectory. For deeper insights into Alkami’s financial health and growth potential, including 8 additional ProTips and comprehensive valuation metrics, visit InvestingPro.

In other recent news, Alkami Technology Inc. announced its fourth-quarter 2024 earnings, revealing a significant miss on earnings per share (EPS) expectations. The company reported an EPS of -0.08, falling short of the forecasted 0.08, although revenue slightly exceeded expectations at $89.66 million, marking a 26% year-over-year increase. Despite the revenue growth, the negative EPS suggests potential operational challenges. Alkami’s full-year 2024 revenue reached $333.8 million, a 26% increase from the previous year, with a positive adjusted EBITDA of $26.9 million. The company also highlighted its recent acquisition of Mantle, expected to enhance product offerings and contribute $30 million in revenue in 2025. Analysts from Citi and Barclays (LON:BARC) have shown interest in the acquisition’s potential for cross-selling opportunities and its impact on EBITDA. Alkami has set a revenue guidance range of $440-$445 million for 2025, indicating a 32-33% increase, with expectations for Mantle to be EBITDA accretive by 2026.

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