Why IDT Stock Was a Massive Winner This Week
Key Points
This, despite the fact that it missed slightly on earnings.
What helped was a price target raise from an analyst.
IDT (NYSE: IDT) stock did much better than many of its more high-profile peers in the fintech and telecom spaces this week. Propelled by an impressive quarterly earnings report and an analyst's subsequent price target raise, the company's equity rose by a sturdy 17% over the five trading days, according to data compiled by S&P Global Market Intelligence.
Calling on growth
On Tuesday morning, IDT took the wraps off its final set of financials for fiscal 2026. Its fourth quarter set new records for several line items, including gross profit and income from operations.
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As for the major fundamentals, revenue rose 7% year over year to $339 million, driven by growth across all four of its reporting segments. Attributable net income under generally accepted accounting principles (GAAP) surged by 29% to almost $22 million. On a non-GAAP (adjusted) and per-share basis, bottom-line profitability rose to $0.94 from $0.76.
That actually meant a mixed quarter for IDT, as it easily beat the $320 million consensus analyst estimate for revenue, but missed on the collective $0.97 forecast for adjusted net income.
That didn't dissuade Freedom Broker analyst Mikhail Paramonov from raising his price target on the stock, though. The pundit now feels it's worth $85 per share, well up from his previous $75. He maintained his buy recommendation on the company.
Grateful for good guidance
Stocks trade on forward potential much more than they do trailing results. IDT guided for double-digit percentage growth in annual gross profit, which it believes will land at $545 million to $555 million this fiscal year.
It also anticipates notching a new record for yearly adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $176 million to $180 million.
IDT feels like a business that's going from strength to strength, as evidenced by its across-the-board revenue growth and high margins. I believe the company can achieve its lofty 2027 goals, and its future remains bright.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.