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Craig-Hallum upbeat on Mitek Systems shares, focus turns to revenue outlook

EditorEmilio Ghigini
Published 04/16/2024, 08:58 AM

Tuesday - An analyst from Craig-Hallum has raised the price target on Mitek Systems (NASDAQ: NASDAQ:MITK) shares to $19.00, up from the previous target of $17.00, while maintaining a Buy rating. The revision follows Mitek Systems' recent financial disclosures, including the company's first quarter results and the filing of their 10-Q report.

Mitek Systems, known for its digital identity verification solutions, reported first quarter results that were largely anticipated to be lackluster, particularly due to a challenging comparison with a significant Mobile Deposit deal in the previous year.

Despite the unremarkable first quarter figures, the company has projected a substantial revenue increase for the second quarter, which has already concluded and anticipates continued sequential improvement. Moreover, year-over-year growth is expected to accelerate in the second half of the fiscal year.

The company's guidance for the full fiscal year 2024 remains unchanged, with revenue growth expected to surge from 1% year-over-year in the March quarter to 27% year-over-year by the September quarter.

Operating profit margins (OPM) are forecasted to be in the low-30s percentage range. The analyst highlighted the potential for OPMs to further increase in fiscal year 2025, driven by the Identity business segment, which is predicted to reach profitability by the fourth quarter ending in September.

InvestingPro Insights

Following the analyst's optimistic outlook on Mitek Systems, current metrics from InvestingPro provide a deeper financial perspective on the company. Mitek's impressive gross profit margin stands at 86.7%, indicating efficient operations and a strong competitive edge in its market. Additionally, the company has demonstrated a high return over the last year, with a 57.3% price total return, reflecting investor confidence and market performance.

InvestingPro Tips suggest that Mitek's net income is expected to grow this year, which aligns with the company's own revenue growth projections. The company's trading at a P/E ratio of 85.17, and an adjusted P/E ratio for the last twelve months as of Q4 2023 at 63.57, which may be attractive to investors looking for growth potential. Moreover, the company's liquid assets exceed short-term obligations, providing financial stability and the ability to invest in future growth.

For those interested in a deeper dive into Mitek Systems' financials and strategic positioning, InvestingPro offers additional insights and metrics. Readers can unlock a wealth of detailed analyses and exclusive tips, including 17 further InvestingPro Tips for Mitek Systems, by visiting https://www.investing.com/pro/MITK. To enhance your investing strategy, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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