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Ebix results tomorrow and notes for the week ?3

11:59 27-Apr-21

The Ebix conference call has just concluded.  The 10-K will be filed later today with an unqualified opinion, which should remove any regulatory concerns for the stock.  It was also noted that the 1Q21 report is likely to be delayed by a week or so to mid to late May, in order to allow new auditors time to catch up.  Thus, I'm not surprised at the muted response in the stock given the down market today, and the global pandemic situation.  The CEO began by noting that 2 employees have died due the pandemic in the past 96 hours and many more are victims worldwide. 

I've repeatedly noted that growth in emerging markets is a messy business and that Ebix doesn't hide that.  However, there is no denying that the growth is there, even with global travel restrictions.  Thus, in the coming weeks or months, even before those restrictions fully lift, I expect EBIX to trade in the high thirties.  In light of this growth, the debt profile looks more manageable regardless of the terms of the EbixCash IPO.  Management did note that it is vetting a 5th international investment banker for that process.  Even in the current environment, the company is already reducing debt with long term decreasing by over 8% and and short term by more than 20% YoY.

Over the longer term, I expect EBIX fair value to increase to at least the high fifties as economies reopen and the company executes the IPO.  This is even though I have little doubt that management's operations will continue to be messy.  EBIX has always been volatile and with better execution from the company and governments, prices in the 80s could still represent a very reasonable valuation over the next few years.

Ebix has reported its fourth quarter results:

• 94 cents of EPS beats by 15 cents
• from $222.1M of revenue, which beats by $34.6M

There was a $6.2M one-time charge to the Ebix Health Administration JV resulting in GAAP earnings being 30 cents lower.  However, revenue would have been higher by about the same amount but for currency effects.  Presumably that will be even worse this quarter, though, as the rupee has given back 3% since March due to the situation I reference below.  On the bright side, share count dropped by 300K.

EBIX is up about 4% before the bell, to $34.  The conference call is at 11am and I will probably add at least brief comments after that.

On 4/26/21 9:42 AM, Esekla wrote:

Ebix will finally report official results tomorrow morning.  I've already given the projections, but it's also worth noting that despite, or more likely because of the push to work, India turning out to be every bit the pandemic disaster that I originally envisioned. 

OLED investors might be interested to see that includes AMOLED screen production, but I will be more interested in the price of MX shares as HSR expiration passes.  Korea remains the primary regulatory question mark, though, as America was unlikely to give this any attention.

The delisting of GMLPP in May is also as predicted.  That's sparking an 8% sell off this morning from those who can't sell the bonds without a retail brokerage. 

I doubt BGC management will have any commentary about Gensler taking the reins at the SEC.  Most of the market will be paying more attention to other earnings drama and lack thereof from the FOMC this week anyway, after the BoC was first to begin tapering.  It cut bonds purchases by a quarter, as expected, but CAD/USD merely regained prior levels initialy.  It's seeing a little upward pressure this morning, though, as expectations for the Fed to take similar steps begin advancing to the Fall from next year.  I see this as more of a tailwind for TU than Telus once again being recognized as the best network in Canada.  It's also a kick in the pants for common workers, but just like in India decision makers have never actually cared about them.

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