Announcement • Aug 31
Ebix Files Form 15 Ebix, Inc. has announced that it has filed a Form 15 with the Securities and Exchange Commission to voluntarily deregister its common stock under the Securities Exchange Act of 1934, as amended. The par value of the company's common stock was $0.10 per share. Announcement • Aug 22
Ebix, Inc. announced delayed 10-Q filing On 08/21/2024, Ebix, Inc. announced that they will be unable to file their next 10-Q by the deadline required by the SEC. Announcement • Jul 02
Everyday Health Media, LLC agreed to acquire North American assets of Ebix, Inc. from Ebix, Inc. (OTCPK:EBIX.Q) for $4 million. Everyday Health Media, LLC agreed to acquire North American assets of Ebix, Inc. from Ebix, Inc. (OTCPK:EBIX.Q) for $4 million on June 26, 2024. A cash consideration of $4.05 million will be paid by Everyday Health Media, LLC. The transaction is subject to approval of bankruptcy court. Sidley Austin LLP acted as a legal advisor to Ebix. Announcement • Apr 02
Zinnia Distributor Solutions LLC completed the acquisition of North American Life and Annuity assets from Ebix, Inc. (NasdaqGS:EBIX). Zinnia Distributor Solutions LLC entered into a stalking horse agreement to acquire North American Life and Annuity assets from Ebix, Inc. (NasdaqGS:EBIX) for $400 million on December 18, 2023. The sell side breakup fee is equivalent to $12 million. Ash Sawhney, President of Ebix Insurance Solutions North America, will join Zinnia heading up the newly formed Life and Annuity Exchange Solutions business, reporting to Trogni. Joining him will be members of the Ebix Life and Annuity senior leadership team and all L&A employees globally. The transaction is subject to approval by bankruptcy court, regulatory approval and the approval of antitrust institution. The transaction is approved by the acquirer board. On February 15, 2024, Zinnia received Court approval to acquire Ebix L&A Assets after being named the winning bidder. The transaction is expected to close in early March. Thomas Califano, Scott Parel and Justin Macke of Sidley Austin LLP acted as legal advisor, AlixPartners, LLP, Jefferies LLC, and Huron Consulting Group acted as financial advisor to Ebix, Inc. Samuel Khalil, Jason T. Anderson and Matthew Brod of Milbank LLP acted as legal advisor alongside financial advisors Citi and RBC Capital Markets. C Street Advisory Group is serving as strategic communications advisor to Zinnia Distributor Solutions LLC.Zinnia Distributor Solutions LLC completed the acquisition of North American Life and Annuity assets from Ebix, Inc. (NasdaqGS:EBIX) on April 1, 2024. Announcement • Feb 21
Nasdaq Stock Market, LLC Files Form 25 with the Securities and Exchange Commission to Remove Ebix's Common Stock from Listing, Effective at the Opening of the Trading Session on February 26, 2024 As previously disclosed, on December 18, 2023, Ebix, Inc. (the ‘Company’) received written notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC (‘Nasdaq’) notifying the Company that, as a result of the Chapter 11 Cases and in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq had determined that the Company’s common stock will be delisted from Nasdaq. Trading of the Company’s common stock was suspended at the opening of business on December 28, 2023. On February 15, 2024, Nasdaq filed a Form 25 with the Securities and Exchange Commission announcing that Nasdaq has determined to remove the Company’s common stock from listing pursuant to Rule 12d2-2 under the Securities Exchange Act of 1934, as amended, effective at the opening of the trading session on February 26, 2024. Announcement • Dec 28
Ebix, Inc.(OTCPK:EBIX.Q) dropped from NASDAQ Composite Index Ebix, Inc. has been dropped from NASDAQ Composite Index. Announcement • Dec 20
Motion for Joint Administration Filed by Ebix, Inc. Ebix, Inc., along with its affiliates, filed a motion for joint administration of their Chapter 11 bankruptcy cases in the US Bankruptcy Court on December 18, 2023. As per the motion, the debtor seeks the joint administration of the cases of its affiliates, Vertex, Incorporated, PB Systems Inc., Ebix Consulting, Ebix US, LLC, Facts Services, Inc., Doctors Exchange, Inc., Ebix International, LLC, Agency Solutions.Com, LLC, ConfirmNet Corporation, A.D.A.M., Inc. and Ebix Latin America, LLC with its own case for administrative and procedural purposes. Ebix, Inc. has been proposed as the lead debtor. Announcement • Dec 18
Ebix, Inc.(NasdaqGS:EBIX) dropped from S&P Software & Services Select Industry Index Ebix, Inc.(NasdaqGS:EBIX) dropped from S&P Software & Services Select Industry Index Announcement • Nov 11
Ebix, Inc. announced delayed 10-Q filing On 11/09/2023, Ebix, Inc. announced that they will be unable to file their next 10-Q by the deadline required by the SEC. Major Estimate Revision • Nov 10
Consensus EPS estimates fall by 54% The consensus outlook for fiscal year 2023 has been updated. 2023 EPS estimate fell from US$0.56 to US$0.26. Revenue forecast unchanged from US$621.2m at last update. Net income forecast to shrink 12% next year vs 15% growth forecast for Software industry in the US . Consensus price target of US$5.00 unchanged from last update. Share price fell 43% to US$3.56 over the past week. Valuation Update With 7 Day Price Move • Nov 10
Investor sentiment deteriorates as stock falls 39% After last week's 39% share price decline to US$3.65, the stock trades at a forward P/E ratio of 4x. Average forward P/E is 44x in the Software industry in the US. Total loss to shareholders of 86% over the past three years. Valuation Update With 7 Day Price Move • Oct 25
Investor sentiment deteriorates as stock falls 17% After last week's 17% share price decline to US$5.24, the stock trades at a forward P/E ratio of 5x. Average forward P/E is 42x in the Software industry in the US. Total loss to shareholders of 71% over the past three years. Valuation Update With 7 Day Price Move • Oct 03
Investor sentiment deteriorates as stock falls 23% After last week's 23% share price decline to US$8.24, the stock trades at a forward P/E ratio of 7x. Average forward P/E is 41x in the Software industry in the US. Total loss to shareholders of 59% over the past three years. Buying Opportunity • Sep 19
Now 20% undervalued after recent price drop Over the last 90 days, the stock is down 43%. The fair value is estimated to be US$16.48, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 18% over the last 3 years. Earnings per share has declined by 23%. Revenue is forecast to decline by 31% in a year. Earnings is forecast to grow by 1.6% in the next year. Major Estimate Revision • Aug 16
Consensus EPS estimates fall by 61% The consensus outlook for earnings per share (EPS) in fiscal year 2023 has deteriorated. 2023 revenue forecast decreased from US$662.8m to US$621.2m. EPS estimate also fell from US$1.43 per share to US$0.56 per share. Net income forecast to grow 1.6% next year vs 15% growth forecast for Software industry in the US. Consensus price target of US$50.00 unchanged from last update. Share price fell 43% to US$14.86 over the past week. New Risk • Aug 10
New minor risk - Profit margin trend The company's profit margins are lower than last year and have reduced by more than 30%. Net profit margin: 3.1% Last year net profit margin: 7.0% This is considered a minor risk. A large drop in profit margin could indicate the company does not have strong competitive advantages or it is yet to establish itself and its core business. Even if it is a well established business, this may make it a much riskier investment than one that has a combination of proven competitive advantages and a stable or growing profit margin. Currently, the following risks have been identified for the company: Major Risk Interest payments are not well covered by earnings (1.5x net interest cover). Minor Risks Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Share price has been volatile over the past 3 months (11% average weekly change). Profit margins are more than 30% lower than last year (3.1% net profit margin). Buying Opportunity • Aug 10
Now 24% undervalued after recent price drop Over the last 90 days, the stock is down 4.1%. The fair value is estimated to be US$19.54, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 20% over the last 3 years. Earnings per share has declined by 23%. Revenue is forecast to decline by 44% in a year. Earnings is forecast to grow by 1.6% in the next year. Valuation Update With 7 Day Price Move • Aug 09
Investor sentiment deteriorates as stock falls 22% After last week's 22% share price decline to US$21.71, the stock trades at a forward P/E ratio of 13x. Average forward P/E is 45x in the Software industry in the US. Total loss to shareholders of 13% over the past three years. Announcement • Aug 03
Ebix, Inc. to Report Q2, 2023 Results on Aug 09, 2023 Ebix, Inc. announced that they will report Q2, 2023 results on Aug 09, 2023 Announcement • Jul 28
Plaintiffs in Two Legal Cases Voluntarily Dismiss Claims Against Ebix, Inc. Without Prejudice Ebix, Inc. issued an informational release declaring that the plaintiffs in two cases in the United States District Court for the Northern District of Georgia and Superior Court of Fulton County State of Georgia voluntarily dismissed their claims without prejudice. Those cases are respectively captioned Lilienfeld v. Raina, et al. and Shah v. Raina, et al. Previously on July 17, 2023, the United States District Court Southern State of New York (SSNY) had issued a formal ruling in the matter of Ebix, Inc. (Ebix) vs. Rahul Saraf (Plaintiff) and dismissed the class action securities suit against Ebix. Ebix announcing this dismissal on July 18, 2023. On November 5, 2021, Daniel Lilienfeld, a purported shareholder of the Company, filed a derivative action in the United States District Court for the Northern District of Georgia on behalf of Ebix captioned Lilienfeld v. Raina, et. al. The complaint had asserted a claim of breach of fiduciary duty related to the RSM resignation against all the individual defendants. On December 29, 2021, Sunil Shah, a purported shareholder of the Company, filed a derivative action in the Superior Court of Fulton County of the State of Georgia on behalf of Ebix captioned Shah v. Raina, et. Al. The complaint had asserted a claim of breach of fiduciary duty related to the RSM resignation against all the individual defendants. On July 17, 2023, the United States District Court Southern State of New York (SSNY) issued a formal ruling in the matter of Ebix, Inc. (Ebix) vs. Rahul Saraf (Plaintiff) and dismissed the class action securities suit against Ebix. The District Court also denied the Plantiff’s request to file new amended claims, after reviewing the previous three amended complaints, and ordered the dismissal of the third amended complaint. The Plaintiff had filed a Third Amended Complaint. It includes four sets of new allegations: First, that Ebix officers Raina and Hamil had a motive to conceal the weakness in internal controls to ensure a successful IPO — and that this IPO was Ebix’s only hope of avoiding insolvency. Second, that Raina switched his compensation from stock to cash in 2021 because he knew of a weakness in Ebix’s internal controls. Third, that Raina and Hamil allegedly admitted a material weakness in internal control at EbixCash in the DRHP and Fourth, that a “damning” report by Hindenburg Research — and Defendants’ responses to it — reveal knowledge of the alleged weakness. Ebix requested SSNY court for dismissal, arguing that, even with the new allegations, Plaintiff did not establish scienter (the validity of the allegations). The Court agreed and Ebix’s motion to dismiss was GRANTED, and the Third Amended Complaint dismissed. Announcement • Jul 21
Southern District Court of New York Dismisses Securities Suit Against Ebix Ebix, Inc. issued an informational release declaring that the United States Southern District Court State of New York (SDNY) yesterday issued a formal ruling in the matter of Ebix, Inc. (“Ebix”) vs. Rahul Saraf (the “Plaintiff”) and dismissed the class action securities suit against Ebix. The District Court also denied the Plantiff’s request to file new amended claims, after reviewing the previous three complaints, and ordered the dismissal of the third amended complaint. The Plaintiff had filed a Third Amended Complaint. It includes four sets of new allegations: First, that Ebix officers Raina and Hamil had a motive to conceal the weakness in internal controls to ensure a successful IPO — and that this IPO was Ebix’s only hope of avoiding insolvency. Second, that Raina switched his compensation from stock to cash in 2021 because he knew of a weakness in Ebix’s internal controls. Third, that Raina and Hamil allegedly admitted a material weakness in internal control at EbixCash in the DRHP and Fourth, that a “damning” report by Hindenburg Research — and Defendants’ responses to it — reveal knowledge of the alleged weakness. Ebix requested SDNY court for dismissal, arguing that, even with the new allegations, Plaintiff did not establish scienter (the validity of the allegations). The court agreed and Ebix’s motion to dismiss was GRANTED, and the Third Amended Complaint dismissed. Earlier in this putative class action, the Plantiff had brought securities fraud claims against Ebix and two Ebix executives, Robin Raina and Steven Hamil (the “Individual Defendants”). The court ruled that Plaintiff had alleged that, between November 9, 2020, and February 19, 2021 (the “Class Period”), Defendants made material misstatements regarding Ebix’s internal control over its financial reporting. In a prior Opinion and Order, the court had granted Ebix’s motion to dismiss the Second Amended Complaint, finding that Saraf failed to plead scienter. Thereafter, Saraf filed the operative Third Amended Complaint, adding the above four sets of allegations. Valuation Update With 7 Day Price Move • Jun 29
Investor sentiment improves as stock rises 21% After last week's 21% share price gain to US$27.65, the stock trades at a forward P/E ratio of 17x. Average forward P/E is 44x in the Software industry in the US. Total returns to shareholders of 31% over the past three years. Valuation Update With 7 Day Price Move • May 22
Investor sentiment improves as stock rises 18% After last week's 18% share price gain to US$18.53, the stock trades at a forward P/E ratio of 11x. Average forward P/E is 39x in the Software industry in the US. Total loss to shareholders of 7.1% over the past three years. Reported Earnings • May 10
First quarter 2023 earnings released: EPS: US$0.23 (vs US$0.63 in 1Q 2022) First quarter 2023 results: EPS: US$0.23 (down from US$0.63 in 1Q 2022). Revenue: US$242.8m (down 15% from 1Q 2022). Net income: US$7.07m (down 63% from 1Q 2022). Profit margin: 2.9% (down from 6.7% in 1Q 2022). The decrease in margin was driven by lower revenue. Over the last 3 years on average, earnings per share has fallen by 18% per year but the company’s share price has only fallen by 3% per year, which means it has not declined as severely as earnings. Announcement • May 05
Ebix, Inc. to Report Q1, 2023 Results on May 10, 2023 Ebix, Inc. announced that they will report Q1, 2023 results on May 10, 2023 Valuation Update With 7 Day Price Move • Apr 10
Investor sentiment improves as stock rises 18% After last week's 18% share price gain to US$15.10, the stock trades at a forward P/E ratio of 8x. Average forward P/E is 44x in the Software industry in the US. Total loss to shareholders of 5.2% over the past three years. Reported Earnings • Mar 16
Full year 2022 earnings: Revenues exceed analysts expectations while EPS lags behind Full year 2022 results: EPS: US$2.10 (down from US$2.23 in FY 2021). Revenue: US$1.05b (up 5.5% from FY 2021). Net income: US$64.6m (down 5.2% from FY 2021). Profit margin: 6.2% (down from 6.9% in FY 2021). The decrease in margin was driven by higher expenses. Revenue exceeded analyst estimates by 2.9%. Earnings per share (EPS) missed analyst estimates by 8.7%. Over the last 3 years on average, earnings per share has fallen by 15% per year but the company’s share price has increased by 2% per year, which means it is well ahead of earnings. Valuation Update With 7 Day Price Move • Dec 12
Investor sentiment improved over the past week After last week's 15% share price gain to US$21.23, the stock trades at a forward P/E ratio of 8x. Average forward P/E is 43x in the Software industry in the US. Total loss to shareholders of 34% over the past three years. Valuation Update With 7 Day Price Move • Nov 21
Investor sentiment deteriorated over the past week After last week's 19% share price decline to US$18.43, the stock trades at a forward P/E ratio of 7x. Average forward P/E is 42x in the Software industry in the US. Total loss to shareholders of 44% over the past three years. Board Change • Nov 16
Insufficient new directors There is 1 new director who has joined the board in the last 3 years. The company's board is composed of: 1 new director. 2 experienced directors. 6 highly experienced directors. Independent Director Priyanka Kaul was the last director to join the board, commencing their role in 2021. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Reported Earnings • Nov 10
Third quarter 2022 earnings: Revenues exceed analysts expectations while EPS lags behind Third quarter 2022 results: EPS: US$0.59 (up from US$0.50 in 3Q 2021). Revenue: US$257.9m (up 35% from 3Q 2021). Net income: US$18.3m (up 18% from 3Q 2021). Profit margin: 7.1% (down from 8.1% in 3Q 2021). The decrease in margin was driven by higher expenses. Revenue exceeded analyst estimates by 22%. Earnings per share (EPS) missed analyst estimates by 9.2%. Revenue is expected to decline by 6.8% p.a. on average during the next 2 years, while revenues in the Software industry in the US are expected to grow by 9.3%. Over the last 3 years on average, earnings per share has fallen by 12% per year but the company’s share price has fallen by 21% per year, which means it is performing significantly worse than earnings. Valuation Update With 7 Day Price Move • Nov 08
Investor sentiment deteriorated over the past week After last week's 16% share price decline to US$16.62, the stock trades at a forward P/E ratio of 5x. Average forward P/E is 39x in the Software industry in the US. Total loss to shareholders of 58% over the past three years. Seeking Alpha • Sep 27
Ebix: Affordable Bet On The Fast-Growing Fintech Industry Summary
The massive -44.80% 6-month price performance of EBIX has made it very affordable. It touts a TTM P/E of 8.7x.
The average TTM P/E of EBIX’s sector peers is 20.59x. EBIX’s net income margin is 57% higher than its peers.
EBIX is still small but worthy investment in the fast-growing, 20.3% CAGR fintech industry.
EbixCash is big in India. India’s fintech market is predicted to generate $200 billion revenue by 2030.
Ebix's handicap is that it has numerous business channels. This could be the reason why it has lower gross margins than its peers.
If you want to profit from the rapidly growing $160 billion fintech industry, consider going long on Ebix, Inc.(EBIX). The -44.80% price decline has made EBIX very affordable. It is now trading less than $20 – far below its 52-week high of $44.42.
Seeking Alpha
The market cap of Ebix is now less than $610 million. A little over four years ago, EBIX's market cap was greater than $2.7 billion. Ebix is a fallen angel, it could be a future takeover target of bigger fintech companies.
Yes, EBIX could be a falling knife along with many tickers. The Dow chart below illustrates that Ebix’s business performance might not be the problem. Emotional investors are pulling down the stock market in general. Even the biggest fintech company, Visa (V), has -18.21% six-month price return.
CNBC.com
Don’t Be Intimidated By Big Dips
Thanks to the universal stock market fear and panic, EBIX could be purchased at just 7.12x forward P/E. The opportunity here can be gleamed by carefully studying the chart below.
Seeking Alpha Premium
EBIX is a perfect value play because its forward valuation is 65% lower than its sector peers' average. The TTM Price/Sales valuation of software solutions provider Ebix is only 0.61, 77% lower than its peers’ average.
I think the significant undervaluation of EBIX is unjust. This company's net income margin is 6.97%, 66.7% higher than its sector peers. Ebix Inc. is consistently profitable since 2010. Consistent profitability in a very competitive and crowded industry should be rewarded.
Seeking Alpha Premium
The negativity over EBIX might be because its 5-year net income margin used to be 16.84%. My takeaway is that stiff competition is forcing it into a pricing war to gain more customers. Lower fees for its fintech software solutions is emphasized by Ebix’s 31% TTM gross profit margin. This is again notably lower than its 5-year average of 54.27%. These dips in margins are forgivable. Sacrificing gross/net margins to gain or protect market share is a valid business tactic in my opinion.
Ebix is a small fish competing against giants like Visa or PayPal (PYPL). Lower pricing is an easy way for Ebix to attract customers away from its much larger competitors. Further, growth-focused investors likely know that smaller companies possess greater growth potential than firms like Visa. Consequently, Ebix outperforming the growth rates of its bigger rivals should attract more bulls.
Too Many Business Segments Is Not Ideal
The extremely diversified software solutions of Ebix is confusing. A small company that is dipping into so many pies is probably not very attractive to defensive investors. However, I think the varied services and partners of this company means its growth is all but assured.
ebix.com
Ebix could probably go back to posting a revenue CAGR greater than 15% if only management starts focusing on its most promising channels. My decades of being a freelance multimedia artist has taught me that focusing on 2 or 3 markets is the best way to make money.
EBIX boasts a median 5-year revenue CAGR of 25.39%. Unfortunately, it is now only 9.07% – lower than Visa’s 24% and PayPal’s 10.66%. The fault in EBIX’s star could be an over diversified product lineup. This company was founded in 1976 and yet it never became a $5 billion company. We can blame it partly on too many business segments in my opinion.
ebix.com
The R&D and marketing costs of so many services/solutions could also be the reason for its lowly 31% gross margin. A laser focus on insurance and finance channels is desirable. There's no urgent need for that travel solution and education channels. I think they should be sold to fortify the insurance, finance, and consulting channels.
On the other hand, having so many business segments could also be why it continues to survive. My takeaway is that a streamlined product portfolio could boost Ebix's market share in the fintech business. The 20.3% CAGR of this particular business could keep attracting big firms and startups.
Allied Market Research
EbixCash Is Very Promising
My favorite reason to endorse this stock is EbixCash. Low fees of digital transactions/remittances eventually add up to substantial amount. EbixCash only needs to attract enough of a number of customers.
EbixCash is big in India. This is very important because India is experiencing exponential growth in fintech services. It is estimated that India’s fintech technology services market will generate revenues of $200 billion and $1 Trillion AUM (assets under management by 2030).
ebixcash.com
Those 650k retail outlets in India make EbixCash a very important player in India’s local and cross border remittances and digital payments. India persists as the world’s no.1 country in terms of international remittances received. It received 89 billion in inflow money transfers. Valuation Update With 7 Day Price Move • Sep 22
Investor sentiment deteriorated over the past week After last week's 16% share price decline to US$19.76, the stock trades at a forward P/E ratio of 6x. Average forward P/E is 44x in the Software industry in the US. Total loss to shareholders of 53% over the past three years. Upcoming Dividend • Aug 24
Upcoming dividend of US$0.075 per share Eligible shareholders must have bought the stock before 31 August 2022. Payment date: 15 September 2022. Payout ratio is a comfortable 13% and this is well supported by cash flows. Trailing yield: 1.3%. Lower than top quartile of American dividend payers (4.1%). Higher than average of industry peers (0.9%). Valuation Update With 7 Day Price Move • Aug 16
Investor sentiment improved over the past week After last week's 17% share price gain to US$24.41, the stock trades at a forward P/E ratio of 8x. Average forward P/E is 52x in the Software industry in the US. Total loss to shareholders of 29% over the past three years. Reported Earnings • Aug 10
Second quarter 2022 earnings: EPS exceeds analyst expectations while revenues lag behind Second quarter 2022 results: EPS: US$0.63 (up from US$0.51 in 2Q 2021). Revenue: US$250.8m (up 1.8% from 2Q 2021). Net income: US$19.3m (up 23% from 2Q 2021). Profit margin: 7.7% (up from 6.4% in 2Q 2021). Revenue missed analyst estimates by 7.2%. Earnings per share (EPS) exceeded analyst estimates by 8.6%. Over the next year, revenue is forecast to grow 18%, compared to a 18% growth forecast for the industry in the US. Over the last 3 years on average, earnings per share has fallen by 11% per year whereas the company’s share price has fallen by 13% per year. Buying Opportunity • Aug 09
Now 31% undervalued after recent price drop Over the last 90 days, the stock is down 25%. The fair value is estimated to be US$30.38, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 27% over the last 3 years. Earnings per share has declined by 11%. Revenue is forecast to grow by 15% in a year. Earnings is forecast to grow by 35% in the next year. Valuation Update With 7 Day Price Move • Jul 21
Investor sentiment improved over the past week After last week's 18% share price gain to US$21.83, the stock trades at a forward P/E ratio of 8x. Average forward P/E is 44x in the Software industry in the US. Total loss to shareholders of 49% over the past three years.