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Monday, International Money Express (NASDAQ:IMXI) received a reiterated Neutral rating from BTIG analysts ahead of its upcoming Investor Day on February 26. The event is set to follow the company’s fourth-quarter earnings report earlier the same day. Trading at $17.99, InvestingPro analysis suggests the stock is currently undervalued, with analyst targets ranging from $22 to $30. The company maintains strong fundamentals with a P/E ratio of 9.8x and healthy financial metrics, as detailed in InvestingPro’s comprehensive research report, available among 1,400+ US equity analyses. BTIG’s analysis anticipates the Investor Day will highlight International Money Express’s initiatives to expand its Digital business, provide insights into the Retail segment, and update on the strategic review that was previously announced during the third-quarter earnings.
The company’s strategic review was made public during the third-quarter earnings, and it is expected that the upcoming Investor Day will offer further details on this matter. BTIG analysts have pointed out that while the Digital segment is seen as a key area for future growth, the current majority of International Money Express’s business is still heavily reliant on retail, non-digital transactions. InvestingPro data shows the company maintains strong financial health with a 34% gross profit margin and impressive returns on equity of 41%, suggesting solid operational efficiency despite ongoing business model transitions. These traditional transactions have been declining, particularly in the company’s significant Mexico market.
In their commentary, BTIG analysts noted that management had expressed optimism about the Digital channels during the third-quarter earnings call, stating, "Digital channels have never looked more promising...all that remains for us is to invest in the customer acquisition strategy that will build our business." The analysts suggest that if International Money Express can demonstrate progress in the Digital market, specifically through increased user adoption, it could strengthen confidence in the company’s potential to compete in the digital remittance market.
The report also references intra-quarter remittance data from Mexico, Honduras, and Guatemala, indicating that the overall market volumes have remained consistent with the third quarter. However, the analysts caution that the published data does not differentiate between Retail and Digital volumes. This lack of distinction calls for a cautious approach when evaluating the company’s performance in the fourth quarter.
Investors are advised to pay close attention to the upcoming Investor Day for any new information that may influence their perspective on International Money Express’s market position and growth prospects, especially in the digital remittance space. With a market cap of $560 million and strong liquidity metrics including a current ratio of 1.8, InvestingPro subscribers can access additional insights through exclusive ProTips and detailed financial analysis to make more informed investment decisions.
In other recent news, International Money Express, commonly known as Intermex, announced the acquisition of key assets and operations of Amigo Paisano, a remittance service provider based in Guatemala. This acquisition is expected to enhance Intermex’s digital offerings and solidify its presence in Central America, potentially contributing an incremental adjusted EBITDA of between $3.5 million and $5 million in 2025. Additionally, analysts at Monness, Crespi, Hardt downgraded Intermex’s stock rating from Buy to Neutral, citing uncertainties from recent immigration policy shifts affecting earnings and challenges in bridging the digital/retail divide. They noted that Intermex’s reliance on brick-and-mortar operations could slow growth compared to competitors. The analysts expressed concerns about the investments required to close the digital gap, suggesting that these could lead to a narrower margin base. Intermex has also suspended guidance, raising questions about the stability of its margins. The company is expected to provide more insights during its Investor Day in February 2025.
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