UPDATE: Stephens Starts i3 Verticals, Inc. (NASDAQ: IIIV) at Overweight
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Stephens initiates coverage on i3 Verticals, Inc. (NASDAQ: IIIV) with a Overweight rating, PT $30.00.
The analyst comments "We are initiating coverage of IIIV with an Overweight/Vol rating and $30 price target. Our constructive view of shares is based on: 1) the ongoing shift towards software/integrated payments, which will enhance margins and growth, 2) Concentrations in economically resilient verticals (Healthcare, public sector) undergoing digitization, 3) A well-defined M&A strategy that will benefit from the contraction in private sector valuations, and 4) strategic value of the franchise/ long-term takeout potential. While leverage of 3.9x is elevated relative to peers, IIIV funds the majority of transactions through FCF and maintains ample capacity under its covenants (5.0x). Our GAAP/proforma EPS estimates for '22 and '23 are -$0.30/$1.43 and $0.42/$1.62, respectively."
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