Freedom Broker has raised its target price for small-cap fintech IDT Corporation by almost 11% and reiterated its «buy» recommendation. The new price target implies 29.5% upside to current quotes. IDT is a global provider of communications and payment services. All its financial metrics reflecting the profitability of the business beat forecasts in the latest earnings.  

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Freedom Broker has raised its target price for IDT shares by almost 11% to $85.60 per share, as indicated in a note seen by Oninvest. The target price is now 29.5% higher than the market price of $66.10 per share as of the close yesterday, June 11. Freedom Broker maintains its «buy» recommendation.

Freedom revised upward the target price after IDT reported its earnings for the fiscal-2025 third quarter, ended April 30. Although consolidated revenue of $302 million was 0.4% lower than expected, all profitability indicators delivered beats, the Freedom Broker note said. 

For example, the gross margin was 1.0 percentage point higher than Freedom Broker's estimate, reaching 37.1%, while the operating margin came in 0.9 percentage points better at 8.8%. Net income per share smashed expectations by 16% at $0.86.

Management confirmed its fiscal-2025 adjusted EBITDA guidance of $126 million and its focus on improving profitability across all segments. For context, adjusted EBITDA in 2024 was $89.7 million.

About the company

IDT comprises four businesses: National Retail Solutions, a provider of POS systems; money transfer system BOSS Money; net2phone, offering cloud telephony services; and a traditional communications segment. 

Three of them showed positive performance in the third quarter, led by National Retail Solutions and BOSS Money, whose respective revenue increased more than 20% year over year. The only segment that showed a decline was traditional communications. Its top line was down 5.2% year over year, but that was still better than expected.  

The key risk for IDT's fintech business and the industry as a whole remains Trump's «big, beautiful bill,» which would impose a new 3.5% tax on remittances or noncommercial transfers of money that noncitizens in the U.S. send abroad. The bill's prospects are still unclear, but in its current form, its approval could put significant pressure on the money transfer industry, Freedom Broker stated.

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