Zacks Initiates Coverage of IDT Corporation With Neutral Recommendation

Zacks Investment Research has recently initiated coverage of IDT Corporation IDT, assigning a "Neutral" recommendation to the company's shares. This assessment comes amid a mixed outlook for the company, which has been making notable strides in the communication and payment services space despite industry challenges.

IDT Corporation, headquartered in Newark, NJ, has carved a niche in communication and payment services. Its operations span fintech, cloud communications, and traditional communications, leveraging technology to serve various markets.

IDT's high-growth, high-margin segments — National Retail Solutions (NRS), net2phone, and BOSS Money — are pivotal to its robust performance. In the third quarter of fiscal 2024, these segments contributed to a 310 basis point improvement in consolidated gross margin. NRS, a leading point-of-sale network provider for independent retailers in the United States, has shown remarkable growth with a 65.9% year-over-year increase in merchant services revenues, driven by higher adoption of NRS Pay. This segment's expansion indicates strong future profitability.

The research report highlights several key factors that could drive IDT Corporation’s future growth. These include its technological advancements in net2phone, including new pricing models and AI-powered functionalities, which are expected to drive further growth. The fintech segment, led by BOSS Money, achieved positive adjusted EBITDA for the first time in the third quarter of fiscal 2024, underscoring IDT's effective cost management and revenue growth strategies. Additionally, the company’s ability to capitalize on digital payment trends, particularly the increasing adoption of contactless and digital payment methods, presents significant growth opportunities.

However, potential investors should consider certain risks outlined in the report. IDT faces risks from its exposure to economic downturns and integration challenges. The declining traditional telecom revenues and rising operating expenses add to these challenges. Compliance with evolving fintech regulations and intense competition requires continuous innovation and investment, which could impact profitability.

IDT Corporation’s stock has significantly outperformed its industry peers and the broader market over the past year. Currently trading at low valuation multiples relative to industry standards, the stock presents an attractive entry point for investors, particularly when considering IDT’s strategic market positioning and potential for profitability improvements.

For a comprehensive analysis of IDT Corporation’s financial health, strategic initiatives, and market positioning, you are encouraged to view the full Zacks research report. This in-depth report provides a detailed discussion of the company's operational strategies, financial performance, and the potential risks and opportunities that lie ahead.

Read the full Research Report on IDT Corporation here>>>

Note: Our initiation of coverage on IDT Corporation, which has a market capitalization of $919.3 million, aims to equip investors with the information needed to make informed decisions in this promising but inherently risky segment of the market.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

IDT Corporation (IDT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research