International Money Express, Inc.

IMXI Details

International Money Express, Inc. (NASDAQ: IMXI) specializes in money remittances between the United States and the Latin America and Caribbean (LAC) region. Wire transfers, money orders, foreign exchange, and cash checking are all services offered by the firm. It works offline via a network of agents at various retail venues and self-operated storefronts across the United States and Canada and online via its app and website. As of August 11, 2021, the company's market capitalization stood at USD 655.70 million.

Secured New Debt Facility: IMXI announced on June 28, 2021, that it completed a refinancing of its existing secured debt by securing a USD 87.5 million term loan, a USD 150 million revolving credit facility, and an uncommitted incremental facility, which could be used for up to USD 70 million in additional term or revolving loans. The new facility will mature in 2026.

6MFY21 Results: The company reported a 30.19% rise in total revenues to USD 211.32 million during 6MFY21 (ended June 30, 2021) compared to USD 162.31 million during 6MFY20, primarily due to an increase in transaction volumes driven by the growth in its agent network. In addition, IMXI witnessed an increase in net income to USD 22.20 million during 6MFY21 vs. USD 14.67 million during 6MFY20. As of June 30, 2021, its cash and cash equivalents were USD 139.72 million, and total debt amounted to USD 85.03 million.

Key Risks: A significant majority of the company's transactions are concentrated in a few banks, including Wells Fargo, Bank of America, and US Bank. As a result, any change in significant banking relationships due to regulatory alterations could impact the company's cash flows and operations. Further, in FY20, Elektra, the company's largest paying agent by volume, accounted for almost 18% of total remittance volume. As a result, the loss of Elektra could have a material impact on the company's business and financial condition.

Outlook: In its Q2FY21 earnings release, the company stated that it expects its revenue for FY21 to range between USD 441 million and USD 450 million. Net income is expected to be in the range of USD 43 million to USD45 million, along with an adjusted EBITDA of USD 80 million to USD 83 million.

Valuation Methodology: Price/Earnings Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

IMXI Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: IMXI share price increased by 24.42% in the past three months and is currently at the higher-band of the 52-week range of USD 13.14 to USD 18.69. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is at 70.25. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 18.42. Considering the current trading levels, increase in transaction volumes, firm brand name (particularly in the LAC region), and current valuation, we recommend a "Hold" rating on the stock at the closing price of USD 17.27, up 1.65% as of August 11, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.