i3 Verticals, Inc. (NASDAQ:IIIV) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

i3 Verticals, Inc. (NASDAQ:IIIV) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues beat expectations, coming in 3.6% ahead of forecasts, and the company broke even on a statutory earnings per share (EPS) level. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for i3 Verticals

Taking into account the latest results, the current consensus from i3 Verticals' five analysts is for revenues of US$370.2m in 2023, which would reflect an okay 7.1% increase on its sales over the past 12 months. i3 Verticals is also expected to turn profitable, with statutory earnings of US$0.075 per share. In the lead-up to this report, the analysts had been modelling revenues of US$370.3m and earnings per share (EPS) of US$0.49 in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$32.20, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values i3 Verticals at US$37.00 per share, while the most bearish prices it at US$26.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that i3 Verticals is forecast to grow faster in the future than it has in the past, with revenues expected to display 15% annualised growth until the end of 2023. If achieved, this would be a much better result than the 3.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.1% annually. Not only are i3 Verticals' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for i3 Verticals. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for i3 Verticals going out to 2025, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for i3 Verticals that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.