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SAN DIEGO - Mitek Systems , Inc. (NASDAQ: NASDAQ:MITK), a digital identity and fraud prevention company, has expanded its partnership with Alogent, a provider of banking and payment solutions. The collaboration will integrate Mitek's Check Fraud Defender (CFD) into Alogent's Unify platform, aiming to improve check fraud detection for banks and credit unions.
Check fraud, including forgery and counterfeiting, represents 31% of all bank fraud in the United States, with losses exceeding $20 billion in 2023 and expectations of a higher toll in 2024. The integration of CFD into Unify is a response to the growing sophistication of fraud tactics, leveraging artificial intelligence and machine learning for real-time analysis of checks across all banking channels.
Alogent's VP of Product Management, Ashish Bhatia, emphasized the importance of advanced tools for risk mitigation to protect client operations without compromising the user experience. The partnership is part of Mitek's strategy to address the rising check fraud incidents as more financial institutions seek solutions to combat this issue.
Kerry Cantley, Mitek's Vice President of Digital Banking, expressed enthusiasm for the extended partnership, highlighting the benefits of Mitek's fraud consortium for Alogent's customers in detecting and preventing fraud across various channels, including online, in-branch, and ATMs.
Mitek is recognized for its identity verification technologies and mobile check deposit solutions, trusted by 99% of U.S. banks and numerous global organizations. Alogent serves a range of financial institutions with its platforms that span the transaction ecosystem, employing machine learning and predictive analytics for data intelligence and personalized banking services.
The announcement is based on a press release statement and reflects the companies' efforts to enhance security and trust within the banking industry by deploying advanced fraud detection technologies.
In other recent news, Mitek Systems has experienced a series of developments. The company reported a 4% year-over-year increase in Q3 revenue to $45 million, driven by growth in its Mobile Deposit franchise and Check Fraud Defender product. However, due to challenges in the Identity product segment, which saw a 14% revenue decline, Mitek adjusted its fiscal 2024 revenue outlook to $169 million to $173 million.
H.C. Wainwright, after reviewing the company's performance, has revised its price target for Mitek Systems to $11 from $19, while maintaining a Buy rating. This adjustment follows Mitek's lower-than-expected financial guidance and the downward revision of the full-year revenue forecast.
The company's Identity segment has confronted setbacks, resulting in delays in large deals and impacting the overall operating income and EBITDA margins. Despite these challenges, Mitek continues to invest in its own shares through a repurchase program, providing some downside protection for the stock.
In addition, Mitek announced an ongoing search for a new CEO and expects resumed growth in fiscal Q2 2025, led by its diverse product offerings. More details on revenue and operating targets for fiscal 2025 will be introduced in the next earnings call. These are the recent developments for Mitek Systems.
InvestingPro Insights
As Mitek Systems, Inc. (NASDAQ: MITK) fortifies its position in the fraud prevention market through strategic partnerships, investors are keeping a keen eye on the company's financial health and market performance. The integration of Mitek's Check Fraud Defender with Alogent's platform is poised to address the pressing issue of check fraud which has been costing the banking industry billions annually.
InvestingPro data shows that Mitek has a market capitalization of $423.23 million, reflecting its size within the technology sector. Despite a challenging environment, characterized by a negative revenue growth of -4.59% over the last twelve months as of Q3 2024, the company maintains an impressive gross profit margin of 85.28%, signaling strong control over its cost of goods sold. This financial metric underlines the company's ability to generate profits from its core operations, a critical factor for its long-term sustainability.
An InvestingPro Tip highlights that Mitek's net income is expected to grow this year, offering a glimpse of potential profitability on the horizon. The company's stock has experienced significant volatility, with a notable return over the last week of 12.25%, yet it has fared poorly over the last month with a -24.3% return. This could suggest a momentary rebound or a short-term investor reaction to specific market conditions.
For investors seeking deeper insights, the InvestingPro platform lists additional tips on Mitek, including an analysis of the company's debt levels, profitability, and valuation multiples. With 12 more InvestingPro Tips available, users can access a comprehensive view of the company's financial outlook at https://www.investing.com/pro/MITK.
The partnership with Alogent, coupled with Mitek's robust gross profit margins and anticipated income growth, may position the company favorably in the eyes of investors who value innovation and growth in the fintech sector.
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