On Friday, KeyBanc Capital Markets revised its financial outlook for Alkami Technology Inc. (NASDAQ: ALKT) following the company’s latest earnings report and acquisition announcement. Despite maintaining an Overweight rating on Alkami’s stock, analyst Alex Markgraff lowered the price target from $50.00 to $45.00.
Stock Performance & Market Capitalization
Alkami is currently trading at $30.46, with a market capitalization of $3.05 billion. However, year-to-date, the stock has declined by over 21%, according to InvestingPro data.
Q4 2024 Earnings & Revenue Growth Outlook
Alkami’s Q4 2024 revenue report met expectations but revealed a slight deceleration in Annual Recurring Revenue (ARR) growth. On the positive side, the company’s adjusted EBITDA continued to outperform, reinforcing Alkami’s ability to drive profitability even amid shifting market conditions.
What is EBITDA?
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric used to evaluate a company’s operating performance. It measures profitability before considering the effects of financing decisions, tax obligations, and non-cash expenses like depreciation and amortization. Adjusted EBITDA further refines this metric by excluding one-time expenses, restructuring costs, or other irregular financial items, providing a clearer picture of a company’s core earnings potential. Investors and analysts often use EBITDA to compare companies within the same industry, as it highlights profitability without distortions from different tax structures or capital investments.
Strategic Acquisition of MANTL
Alkami recently announced its acquisition of MANTL, a provider of omnichannel account opening solutions. This move is expected to strengthen Alkami’s product portfolio and bolster its ability to attract new banking clients. The acquisition is viewed as a key revenue synergy driver, further aligning with Alkami’s broader growth strategy.
FY 2025 & 2026 Financial Projections
For fiscal year 2025, Alkami’s organic revenue guidance came in slightly below analyst expectations, though adjusted EBITDA margins were more in line with forecasts. With MANTL now in the picture, analysts anticipate increased scrutiny of Alkami’s implied FY25 guidance, particularly around cross-selling opportunities and contract renewals.
Markgraff has adjusted his FY25 revenue estimates upward to reflect the MANTL acquisition, though this also lowers organic revenue growth projections. Looking ahead to fiscal year 2026, the acquisition is expected to boost revenue and be accretive to adjusted EBITDA, supporting Alkami’s longer-term financial health.
Investor Sentiment & Stock Valuation
Despite some short-term M&A-related dilution, KeyBanc remains optimistic about Alkami’s trajectory. Analyst targets for the stock currently range between $39 and $54, with expectations that the MANTL acquisition will expand banking opportunities and increase Revenue Per User (RPU) while maintaining stable margins.
For more detailed insights into Alkami’s financial outlook and growth potential, including additional ProTips and valuation metrics, visit InvestingPro.
