A Closer Look at Alkami Technology’s Valuation Following New Credit Union Deals and Industry Recognition

Alkami Technology (ALKT) is in the spotlight after announcing new partnerships with Hanscom Federal Credit Union and Red Rocks Credit Union, both adopting its digital banking solutions. Recent industry recognitions support the company's momentum in digital banking innovation.

See our latest analysis for Alkami Technology.

These new credit union partnerships and recent industry accolades have sparked more conversation around Alkami’s long-term growth. However, the 1-year total shareholder return is just below flat at -0.2%. While investor sentiment has perked up on signs of strong product demand, momentum in the share price has not yet followed, suggesting there is still some skepticism or a wait-and-see approach in the market for now.

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With these recent wins and industry accolades, is Alkami’s share price lagging behind its growth potential? Or are investors right to wonder if the company’s future success is already factored in at current valuations?

Most Popular Narrative: 37% Undervalued

With Alkami Technology last closing at $24.12 and the most widely followed narrative assigning a fair value of $38.44, the gap is striking. This narrative is based on expectations of rapid expansion, setting a bold justification for a much higher price than what the market currently reflects.

Growing expectations for advanced, fraud-resistant, omnichannel digital banking experiences are prompting more financial institutions to adopt Alkami's API-driven, cloud-native architecture. This can support secure growth and higher operating leverage. Over time, this trend should improve gross and operating margin profiles.

Read the complete narrative.

Ever wondered what kind of growth story produces such a premium? Hint: It is about a leap in both earnings and recurring revenue, all tied to assumptions that would put Alkami in elite company. See which forecasts are steering this narrative into bullish territory.

Result: Fair Value of $38.44 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, factors such as increasing competition from larger fintechs and possible regulatory shifts could quickly challenge even the most optimistic outlook for Alkami.

Find out about the key risks to this Alkami Technology narrative.

Another View: Are Multiples Telling a Different Story?

While the analyst consensus and future growth assumptions suggest Alkami’s shares are undervalued, the current price-to-sales ratio (6.5x) actually sits higher than the US Software industry average (5.3x) and the fair ratio of 5.6x. This could hint at downside risk if excitement fades or growth slows. Is the market pricing in more than what is realistic, or is this just the cost of high expectations?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Alkami Technology Narrative

If you want to investigate the numbers firsthand or shape your own perspective on Alkami Technology, crafting your own narrative takes just a few minutes. Do it your way.

A great starting point for your Alkami Technology research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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