James Faucette, an analyst from Morgan Stanley, maintained the Hold rating on I3 Verticals (IIIV – Research Report). The associated price target remains the same with $27.00.
James Faucette has given his Hold rating due to a combination of factors that reflect both opportunities and challenges for I3 Verticals. The company’s M&A strategy in the Public Sector shows promise, with a focus on acquiring smaller, sub-scale software businesses that can benefit from payments monetization. However, the elevated valuations in this space require disciplined capital allocation, and while the sale of their Merchant Services business has strengthened their balance sheet, execution remains key.
Additionally, while high single-digit organic growth appears achievable, driven by SaaS strength, payments attach potential, and new logo growth, there are concerns. The Public Sector shows healthy demand, but the Healthcare segment faces challenges with consolidation and competition leading to increased attrition. As such, while there is optimism about underlying trends, the Hold rating reflects a need for consistent execution of growth and M&A priorities before a more positive outlook can be justified.
Faucette covers the Technology sector, focusing on stocks such as Endava, Block, and Shift4 Payments. According to TipRanks, Faucette has an average return of 5.8% and a 65.32% success rate on recommended stocks.