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Singular Research Reiterates BUY.
Ebix, Inc. (EBIX:BUY)
Ebix, Inc. is an international provider of software and e-commerce solutions for the insurance industry. It focuses on the sale and support of its insurance carrier systems, broker/agency management systems and exchange family of products, which provide connectivity between consumers, agents, carriers, and third party providers. It also provides services for software development, delivery of software as an application service provider (ASP), software license, maintenance and business process outsourcing. It has operations in the United States, Australia, New Zealand, Singapore, and India. It was founded in 1976 as Delphi Information Systems and changed its name to Ebix in 2003. The Company is headquartered in Atlanta, Georgia.
Q2:09 RESULTS AND RELATED ACTION ITEMS
- Net sales grew by 8.5% sequentially, and by 26% over the prior year’s quarter, to $22.4M, driven by Exchanges, BPO and Broker Systems.
- North American Q2 net sales grew by 56% year over year. New Zealand Q2 net sales grew 83% year over year with launch of P&C insurance exchange.
- EPS grew by 5.8% sequentially, and by 35.2% year over year, to $0.73.
- Anticipate growth from business initiatives in Exchange and BPO segments.
- Carrier and Broker Systems growth may slow due to postponed IT spending.
- Revenue and EPS estimates increased due to better than expected Q2:09 results and strength of recurring revenue and cross selling business model.
RISKS
- Insurance Industry IT spending and transaction volumes on Ebix exchanges may decline due to current economic recession.
- Strategy for growth through acquisitions is inherently risky.
- High growth rates and margins in insurance exchanges and business process outsourcing markets may attract larger aggressive competitors.
- Continued financing of acquisitions through convertible debt, or stock, may dilute earnings per share.
- EPS growth rate beyond 2011 may be impacted after the net operating loss (NOL) tax carry forward benefits are fully used up.
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