3 Reasons We Love Ibotta (IBTA)

Ibotta’s stock price has taken a beating over the past six months, shedding 32.8% of its value and falling to $48.94 per share. This was partly due to its softer quarterly results and might have investors contemplating their next move.

Given the weaker price action, is now an opportune time to buy IBTA? Find out in our full research report, it’s free.

Why Are We Positive On IBTA?

Originally launched as a way to make grocery shopping more rewarding for budget-conscious consumers, Ibotta (NYSE:IBTA) is a mobile shopping app that allows consumers to earn cash back on everyday purchases by completing tasks and submitting receipts.

1. Skyrocketing Revenue Shows Strong Momentum

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, Ibotta’s 32% annualized revenue growth over the last two years was incredible. Its growth beat the average business services company and shows its offerings resonate with customers.

2. Growth in Total Redemptions Shows Increasing Demand

Revenue growth can be broken down into changes in price and volume (for companies like Ibotta, our preferred volume metric is total redemptions). While both are important, the latter is the most critical to analyze because prices have a ceiling.

Ibotta’s total redemptions punched in at 94.55 million in the latest quarter, and over the last two years, averaged 60.1% year-on-year growth. This performance was fantastic and shows its services have a unique value proposition.

3. Outstanding Long-Term EPS Growth

Analyzing the change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Ibotta’s full-year EPS flipped from negative to positive over the last two years. This is a good sign and shows it’s at an inflection point.

Final Judgment

These are just a few reasons why Ibotta ranks near the top of our list. After the recent drawdown, the stock trades at 13.3× forward price-to-earnings (or $48.94 per share). Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More Than Ibotta

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