IDT (IDT): Valuation Check After Strong Q1 Fintech Growth and Legal Overhang Resolution

On the back of fresh first quarter numbers, IDT (IDT) is suddenly back on many radars, with revenue, margins, and cash generation all moving in the right direction at the same time.

See our latest analysis for IDT.

Those stronger fintech earnings, the ongoing share buyback, and a steady dividend seem to be reshaping sentiment, with the 1 day share price return of 2.1% building on a solid year to date share price gain. The three year total shareholder return of 87.6% shows the longer term story has already rewarded patient holders.

If IDT’s momentum has you thinking about what else might be setting up for a run, this is a good moment to explore fast growing stocks with high insider ownership.

Yet with earnings accelerating, legal clouds lifting, and the share price still trading at a steep discount to analyst targets, investors now face a harder question: Is IDT genuinely undervalued, or is the market already discounting its next leg of growth?

Most Popular Narrative: 34.8% Undervalued

With the narrative fair value set at $80 against IDT's last close of $52.13, the gap hinges on how its earnings power evolves from here.

The analysts have a consensus price target of $85.6 for IDT based on their expectations of its future earnings growth, profit margins and other risk factors.

In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.3 billion, earnings will come to $104.9 million, and it would be trading on a PE ratio of 24.8x, assuming you use a discount rate of 6.8%.

Read the complete narrative.

Curious how modest revenue shrinkage can still support richer margins and a premium earnings multiple, all wrapped into a lower discount rate story, and why that combination still points to upside? Read on to uncover the full playbook behind this valuation call.

Result: Fair Value of $80 (UNDERVALUED)

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

However, investors still need to weigh risks such as BOSS Money’s heavy working capital demands and potential acquisition missteps that could dilute the earnings story.

Find out about the key risks to this IDT narrative.

Build Your Own IDT Narrative

If you see the story differently or would rather dig into the numbers yourself, you can build a custom view in just minutes: Do it your way.

A great starting point for your IDT research is our analysis highlighting 3 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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