IDT (IDT) Could Be 12% Undervalued On Its AI And Subscription Growth Story

IDT stock reaction and recent performance

IDT (IDT) has drawn fresh attention after recent trading, with the stock last closing at US$65.86. It has shown gains over the past week, month and past 3 months that outpaced its 1 year total return.

See our latest analysis for IDT.

For context, IDT’s recent 30.2% year to date share price return and 188.8% three year total shareholder return point to strong momentum over time. The recent 28.8% 90 day share price move suggests that trend has been building rather than fading.

If IDT’s recent gains have you thinking about what else is moving, this is a good moment to broaden your search with the Simply Wall St screener for 18 top founder-led companies

After such a strong three year run and a fresh 90 day jump, the key issue for IDT now is simple. Is there still meaningful upside left from here, or has most of the opportunity already been priced in?

Most Popular Narrative: 12.2% Undervalued

With IDT last closing at $65.86 against a narrative fair value of $75, the current setup centers on how its cash generation and AI driven services could support that gap.

The introduction of net2phone's virtual AI agent is projected to enhance customer interactions while reducing costs, potentially increasing net margins and driving growth in earnings.

With ongoing subscription revenue growth and strategic investments in AI and digital channels, net2phone's future performance is expected to boost revenue and improve adjusted EBITDA margins.

Read the complete narrative.

Want to see what sits behind that $75 fair value for IDT? The narrative leans on specific revenue trends, tighter margins, and a higher future earnings multiple. Curious which assumptions really carry the valuation story and how long they are projected to last?

Result: Fair Value of $75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, IDT still faces pressure from working capital needs in BOSS Money, as well as the risk that acquisition driven growth or currency swings could unsettle the current narrative.

Find out about the key risks to this IDT narrative.

Another View on IDT using market multiples

The fair value narrative suggests IDT is 12.2% undervalued at $65.86 against a $75 estimate. Yet on P/E, IDT trades at about 20x earnings, compared with 6.1x for peers and a fair ratio of 13.6x. That richer pricing points to valuation risk rather than a clear bargain. Which signal matters more for you?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Seeing mixed signals on IDT and unsure how to interpret them? Take a closer look at the data now and consider both the potential upside and downside by checking the 1 key reward and 2 important warning signs

Looking for more ideas beyond IDT?

If IDT has caught your attention, do not stop there. Broaden your watchlist now and give yourself more options before the next big move slips by.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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