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Mitek Systems Inc (MITK)
NASDAQ:MITK
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Mitek Systems
(NASDAQ:MITK)
72Outperform
Positive Factors
Financial Performance
MITK reported solid first-quarter results that outperformed consensus across most key metrics.
Identity Segment Growth
Identity segment outperformed with MiVIP transactions up 60% year-over-year and automation yielding a double-digit percentage reduction in cost per transaction, contributing to 300 basis points of gross margin expansion.
Negative Factors
Revenue Growth
Revenue growth is likely to result in muted revenue growth in FY25.
Mitek Systems (MITK) vs. S&P 500 (SPY)
Market Cap
$399.50M
Dividend YieldN/A
Average Volume (3M)561.14K
Price to Earnings (P/E)95.6
Beta (1Y)0.96
Revenue Growth5.28%
EPS GrowthN/A
CountryUS
Employees630
SectorTechnology
Sector Strength45
IndustrySoftware
Share Statistics
EPS (TTM)0.09
Shares Outstanding45,243,713
10 Day Avg. Volume495,953
30 Day Avg. Volume561,140
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.39
Price to Cash Flow (P/CF)182.20
P/FCF Ratio182.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.90Price Target Upside44.46% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Mitek Systems Business Overview & Revenue Model
Company DescriptionMitek Systems (MITK) is a leading provider of digital identity verification and mobile capture solutions. The company operates within the technology and financial services sectors, offering innovative software products that enable organizations to verify identities and authenticate transactions efficiently. Mitek's core products include mobile deposit solutions, which allow users to deposit checks via their smartphones, and identity verification solutions that help businesses confirm the identity of their customers securely and accurately.
How the Company Makes MoneyMitek Systems generates revenue through the sale of its software as a service (SaaS) solutions to banks, financial institutions, and other businesses requiring secure identity verification and mobile deposit technologies. The company's key revenue streams include licensing fees for its software, transaction-based fees depending on the volume of transactions processed using its solutions, and subscription fees for ongoing access to its services. Additionally, Mitek has established significant partnerships with major financial institutions and technology providers, enhancing its market reach and contributing to its revenue growth. The company's earnings are further supported by continuous technological innovation and an increasing demand for secure digital verification solutions in various industries.
Mitek Systems Financial Statement Overview
Summary
Mitek Systems shows strong revenue growth and cash flow generation, with solid balance sheet management. However, the company faces challenges in enhancing profitability and equity returns, which slightly impacts its financial performance score.Income Statement
Mitek Systems shows consistent revenue growth with a 20.3% increase from 2022 to 2023, driven by strong gross profit margins consistently above 90%. However, the net profit margin remains modest at 2.6% TTM, indicating room for profitability improvement. EBIT and EBITDA margins have decreased slightly, reflecting some operational challenges.72
Positive
Balance Sheet
The company maintains a solid balance sheet with an equity ratio of 50.7% TTM, indicating financial stability. The debt-to-equity ratio stands at 0.74, reflecting manageable leverage levels. Return on equity is relatively low at 2.2% TTM, suggesting a need for better utilization of equity capital.75
Positive
Cash Flow
Mitek Systems demonstrates robust cash flow generation, with a significant increase in free cash flow by 32.2% TTM. The operating cash flow to net income ratio of 9.36 suggests strong cash conversion efficiency. The company's ability to generate cash is a key strength, supporting future growth and debt reduction.80
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 139.79M | 172.08M | 172.55M | 143.94M | 119.80M | 101.31M | Gross Profit |
| 125.36M | 171.77M | 149.60M | 123.94M | 105.26M | 88.12M | EBIT |
| 17.09M | 2.23M | 15.56M | 27.57M | 13.71M | 8.87M | EBITDA |
| 27.79M | 25.26M | 39.62M | 28.08M | 24.07M | 18.15M | Net Income Common Stockholders |
| 5.99M | 3.28M | 8.03M | 3.69M | 7.98M | 7.81M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 121.21M | 130.34M | 133.61M | 90.33M | 179.37M | 60.02M | Total Assets |
| 395.96M | 413.75M | 405.38M | 360.41M | 419.28M | 169.15M | Total Debt |
| 148.66M | 148.64M | 140.28M | 134.19M | 129.45M | 7.15M | Net Debt |
| 58.05M | 55.18M | 81.37M | 102.13M | 99.14M | -12.84M | Total Liabilities |
| 195.04M | 198.95M | 200.19M | 190.09M | 226.02M | 36.91M | Stockholders Equity |
| 200.92M | 214.80M | 205.19M | 170.32M | 193.26M | 132.24M |
| Cash Flow | Free Cash Flow | ||||
| 26.99M | 30.25M | 30.55M | 25.23M | 35.95M | 23.32M | Operating Cash Flow |
| 28.34M | 31.69M | 31.59M | 26.35M | 37.34M | 24.12M | Investing Cash Flow |
| -25.22M | 28.75M | -6.78M | -3.53M | -170.49M | -24.71M | Financing Cash Flow |
| -20.68M | -25.88M | 1.70M | -21.14M | 143.68M | 3.40M |
Mitek Systems Technical Analysis
Negative
8.93
Price Trends
10.08
Negative
9.70
Negative
10.07
Negative
Market Momentum
-0.32
Positive
36.64
Neutral
15.52
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MITK, the sentiment is Negative. The current price of 8.93 is below the 20-day moving average (MA) of 9.51, below the 50-day MA of 10.08, and below the 200-day MA of 10.07, indicating a bearish trend. The MACD of -0.32 indicates Positive momentum. The RSI at 36.64 is Neutral, neither overbought nor oversold. The STOCH value of 15.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MITK.
Mitek Systems Risk Analysis
Mitek Systems disclosed 35 risk factors in its most recent earnings report. Mitek Systems reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mitek Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.43B | 23.89 | 34.88% | 0.70% | 11.19% | 51.03% | |
72 Outperform | $10.12B | 47.13 | 75.64% | ― | 12.23% | 24.66% | |
72 Outperform | $399.50M | 95.56 | 2.15% | ― | 5.28% | ― | |
64 Neutral | $4.44B | ― | -20.27% | ― | 24.50% | 49.38% | |
63 Neutral | $41.40B | 77.81 | -47.82% | ― | 14.49% | 21.85% | |
63 Neutral | $29.19B | 75.39 | 15.37% | ― | 25.63% | 118.49% | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% |
* Technology Sector Average
Performance Comparison
MITK
Mitek Systems
8.93
-2.93
-24.70%
FICO
Fair Isaac
1,722.85
394.26
29.68%
MANH
Manhattan Associates
167.52
-88.67
-34.61%
PAYC
Paycom
206.66
21.28
11.48%
TTD
Trade Desk
58.84
-21.59
-26.84%
UPST
Upstart Holdings
46.65
21.35
84.39%
Mitek Systems Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -18.97% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call conveyed a positive outlook with strong growth in identity revenue, SaaS revenue, and Check Fraud Defender expansion. However, challenges remain in the deposit products segment due to renewal timing variability. Overall, the company's strategic initiatives are starting to yield positive results, with expectations for continued growth and improved profitability.Highlights
Strong Identity Revenue Growth
Identity products revenue increased by 13% year-over-year, driven by a 26% year-over-year increase in identity SaaS revenue, showcasing growth in transaction volumes across MiVIP and Mobile Verify.
Check Fraud Defender Expansion
Check Fraud Defender's annual contract value (ACV) is approaching $12 million, reflecting considerable growth with a new top 10 FI signing, indicating substantial untapped growth opportunity.
Improved Profitability and Cash Flow
Adjusted EBITDA increased 32% year-over-year with a 21% margin. Free cash flow conversion improved to 83%, reflecting disciplined management of costs and positive changes in net working capital.
SaaS Revenue Growth
Total SaaS revenue grew 29% year-over-year, with deposit SaaS revenue up 64% and identity SaaS revenue up 26%, indicating strong growth in subscription-based offerings.
Lowlights
Deposit Products Revenue Decline
Deposit revenue declined 9% year-over-year to $19.3 million, primarily due to a 21% decline in deposit software license revenue, reflecting timing air pockets in mobile deposit renewals.
Mobile Deposit Revenue Variability
The uneven revenue phasing due to mobile deposit renewals and transaction inventory purchase timing continues to create variability, impacting short-term revenue predictability.
Company Guidance
During the Mitek Fiscal 2025 First Quarter Earnings Conference Call, significant guidance was provided on the company's strategic direction and financial performance. The company reported total revenue of $37.3 million for Q1, with identity products revenue growing by 13% year-over-year and SaaS revenue increasing 29% year-over-year. The CEO, Ed West, highlighted a four-pillar strategy focusing on strengthening the foundation for durable growth, scaling their identity platform, expanding fraud solutions, and maintaining operational excellence. The company aims for SaaS revenue to approach half of their total revenue by fiscal 2026. Additionally, the Check Fraud Defender (CFD) product saw its annual contract value nearing $12 million, with ambitions to double it in fiscal 2025. Mitek's CFO, Dave Lyle, reiterated the revenue guidance range of $170 million to $180 million for fiscal 2025 and adjusted EBITDA margins between 25% to 28%. The call emphasized Mitek's commitment to innovation in fraud prevention and identity solutions, leveraging AI and biometrics to tackle emerging threats.Mitek Systems Corporate Events
Business Operations and Strategy
Mitek Systems Approves 2025 Incentive Program Plan
Neutral
Jan 28, 2025
On January 28, 2025, Mitek Systems’ Board of Directors approved the company’s annual incentive program for fiscal year 2025. The plan includes performance-based cash bonuses for certain full-time employees and executives, focusing on revenue and Adjusted EBITDA targets in key business areas like deposits and identity. This initiative aims to attract, motivate, and retain talented employees by aligning financial rewards with corporate and individual performance goals, setting bonus targets for executives and maintaining flexibility for further adjustments based on achievements.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.