I3 Verticals (IIIV) Stock Forecast & Price Target

i3 Verticals is favored because it has been reshaped into a more focused Public Sector vertical software company, with more than 96% of revenue now coming from software, services, and integrated payment solutions after over $530M of gross divestiture proceeds were used to eliminate debt in fiscal 2025. Recurring revenue increased 8% Y/Y on a pro forma basis to $43.5M, software subscription revenue climbed 38% Y/Y to $12.8M, and management sees 4%-8% organic growth with continued mix shift toward higher-margin subscription revenue. The outlook is further supported by disciplined M&A, strong execution in Justice Tech and Transportation, and AI-driven efficiency gains that have improved deployment speed and development velocity while positioning adjusted EBITDA margins to expand over time.

i3 Verticals is facing a weakening fundamental trajectory because fiscal 3Q revenue of $53.1M came in below expectations, adjusted EBITDA of $13.3M also missed, and management cut the midpoints of fiscal 2026 revenue and adjusted EBITDA guidance by 3% and 7%, respectively. The core problem is the deterioration in non-recurring revenue, which fell 18% Y/Y to $9.5M as professional services dropped 19% and implementation delays, lower license activity, and a lost managed services renewal exposed fragile near-term execution. Although recurring revenue rose 8% to $43.5M and margin improved to 25.1%, the slowdown in organic growth, reduced fiscal 2026 guidance, and lower preliminary fiscal 2027 expectations suggest a stretched reacceleration path and limited visibility.