I3 Verticals (IIIV) Stock Forecast & Price Target

i3 Verticals is attractive because it is becoming a more focused Public Sector vertical software company, with over 96% of revenue now coming from software, services, and integrated payment solutions after divestitures that generated more than $530M in gross proceeds and eliminated debt. Recurring revenue rose 8% Y/Y to $43.5M, or 82% of revenue, while Software subscription revenue jumped 38% Y/Y to $12.8M, supporting 60bp of margin expansion to 25.1% even as Non-GAAP EBITDA increased 5% Y/Y to $13.3M. The outlook is further supported by a $60M acquisition in Transportation, an eight-figure West Virginia court contract, expected 4%-8% organic revenue growth over the next two years, and additional margin gains from a higher subscription mix and AI-driven efficiency.

i3 Verticals is facing a weakening fundamental profile as its 3Q revenue of $53.1 million came in below expectations, organic growth was about negative 2%, and annualized recurring revenue fell sequentially to $174.1 million from $183.5 million. The company’s mix is also becoming less favorable, with recurring revenue rising 8% but non-recurring revenue falling 18% to $9.5 million amid implementation delays, lower professional services, and a shift toward subscription deals that reduces upfront revenue. Management lowered fiscal 2026 revenue and adjusted EBITDA guidance, cut fiscal 2027 organic growth expectations to the mid-single digits, and the combination of slower growth, competitive pressure, and execution risk supports a negative outlook.