Are Rising AI Investments Shifting IDT's (IDT) Focus Away From Core Profit Growth?

• IDT Corporation recently reported full-year 2025 results, posting US$1.23 billion in sales and US$76.09 million in net income, while announcing ongoing investments in digital innovation and artificial intelligence.
• Despite missing analyst profit estimates for the quarter, IDT achieved record adjusted EBITDA fueled by strong digital channel growth in its BOSS Money fintech segment, and reaffirmed its commitment to shareholder returns through dividends and buybacks.
• We'll explore how record operational performance and technology investments impact IDT's investment narrative and future growth outlook.

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IDT Investment Narrative Recap

To be a shareholder in IDT, you need to believe in the power of digital and AI-driven transformation across fintech and communications, especially as the BOSS Money segment drives operational performance. The recent earnings highlighted strong EBITDA growth and ongoing investment in technology but did not materially shift the near-term catalyst: further digital channel expansion. The biggest risk remains execution challenges around capital allocation, particularly balancing buybacks and dividends with reinvestment in growth.

Among recent announcements, IDT’s decision to maintain its quarterly dividend at US$0.06 per share stands out. This move reinforces management’s commitment to capital returns, even as the company pursues double-digit adjusted EBITDA growth, which is central to the short-term catalyst of profit expansion through digital channels.

However, investors should be aware that with increased capital returns, questions remain about the balance between near-term payout and long-term reinvestment in the business...

Read the full narrative on IDT (it's free!)

IDT's narrative projects $1.3 billion revenue and $104.9 million earnings by 2028. This requires a -0.7% yearly revenue decline and an $8.9 million increase in earnings from $96.0 million today.

Uncover how IDT's forecasts yield a $85.60 fair value, a 72% upside to its current price.

Exploring Other Perspectives

Fair value estimates from five members of the Simply Wall St Community range widely from US$82.93 to US$308.89 per share. As you consider this spectrum, remember that IDT’s current focus on buybacks and dividends invites debate over priorities for growth versus returns.

Explore 5 other fair value estimates on IDT - why the stock might be worth just $82.93!

Build Your Own IDT Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your IDT research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free IDT research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate IDT's overall financial health at a glance.

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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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