Cautious investors not rewarding i3 Verticals, Inc. performance completely


What Does i3 Verticals' Recent Performance Look Like?

Recent times have been advantageous for i3 Verticals as its revenues have been rising faster than most other companies. Perhaps the market is expecting future revenue performance to dive, which has kept the P/S suppressed. If the company manages to stay the course, then investors should be rewarded with a share price that matches its revenue figures.

Is There Any Revenue Growth Forecasted For i3 Verticals?

There's an inherent assumption that a company should underperform the industry for P/S ratios like i3 Verticals' to be considered reasonable.

Taking a look back first, the company grew revenue by an impressive 22% last year. The latest three-year period has also seen a 21% overall rise in revenue, aided extensively by its short-term performance. Therefore, it's fair to say the revenue growth recently has been respectable for the company.

Looking ahead now, revenue is anticipated to climb by 13% during the coming year according to the six analysts following the company. With the industry only predicted to deliver 8.2%, the company is positioned for a stronger revenue result.

In light of this, it's peculiar that i3 Verticals' P/S sits below the majority of other companies. Apparently, some shareholders are doubtful of the forecasts and have been accepting significantly lower selling prices.

The Bottom Line On i3 Verticals' P/S

Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however, it can be a practical guide to the company's future prospects.

i3 Verticals' analyst forecasts revealed that its superior revenue outlook isn't contributing to its P/S anywhere near as much as we would have predicted. The reason for this depressed P/S could potentially be found in the risks the market is pricing in. While the possibility of the share price plunging seems unlikely due to the high growth forecasted for the company, the market does appear to have some hesitation.


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