i3 Verticals, Inc. (IIIV) stock intrinsic value fair value estimate & owner earnings analysis

i3 Verticals now sells software, integrated payments and related services to U.S. state and local governments and other public-sector bodies (courts, municipalities, utilities, schools). In September 2024 it sold its Merchant Services business for about $439.5 million and in May 2025 it sold its Healthcare revenue-cycle business for $96.3 million, so the business today is the smaller public-sector software company that remains. Roughly 76% of continuing revenue is recurring. Revenue was $213.2 million in fiscal 2025 (up 11.5%, of which about $5.9 million came from acquisitions and about $11.4 million from higher recurring revenue), but growth has slowed: the June 2026 quarter grew about 2%, and the first nine months of fiscal 2026 grew about 3%. How we measured earnings. We count what the business generates in cash after stock-based pay and the capital needed to keep it running. Stock-based compensation is a real cost (about $15 million a year in the continuing business, roughly 40% of operating cash flow) and we subtract it. Capitalized software (about $8 million a year) is treated as ongoing capital spending. Large swings in working capital, mostly the roughly $32 million of taxes on the sale gain paid in fiscal 2025, are removed as one-time timing. On that basis the current business earns about $23 million a year (fiscal 2025), and about $0.68 per share on last year's share count. Fiscal 2023 and 2024 are not representative because they still contain the sold businesses, their stock pay and large acquisition-related payments (fiscal 2024 was negative). We then lowered the level to about $19 million because the company spent about $137 million buying back stock in the first nine months of fiscal 2026, drawing its cash from about $67 million to about $3 million and starting to pay interest ($2.5 million in nine months versus $0.9 million in all of fiscal 2025). Fiscal 2026 nine-month operating cash flow of $38.4 million, less $14.9 million of stock pay and roughly $8 million of capital spending, points to a similar level, which supports the figure. Intangible amortization from past acquisitions is large but non-cash; it is reflected in the modest growth assumed rather than in the earnings level. Share count. As of November 2025 there were about 24.0 million Class A shares and 8.4 million Class B/unit interests. After the fiscal 2026 buybacks we estimate roughly 27 million economic shares. The exact current count could not be confirmed from the available filings, so per-share values carry that uncertainty (each 1 million shares is about 4% of value). Base case: about $12.50 per share. Earnings of about $19 million grow roughly 3% a year for ten years, supported by the 76% recurring base and government customers who rarely switch systems; this is at or below the 2-3% current revenue pace, and below the 8% organic growth of fiscal 2025, which we do not assume repeats. After year ten we assume a slow 2% annual decline as acquired technology ages. We did not credit acquisitions (recent purchases were only $11 million to $19 million a year, too small and irregular to count as a proven engine), new products, or payment-volume gains. Bear case: about $6.30 per share. Earnings fall to about $14 million because of the higher interest cost after the buyback, continued slowing of growth, and heavy stock-based pay, then decline 2% a year indefinitely. The company has also written off past acquisitions and paid $19.3 million above estimates on earn-outs in fiscal 2023. Bull case: about $18.80 per share. Earnings grow 6% a year for ten years (below the 8.4% organic growth achieved in fiscal 2025 and the double-digit growth in recurring revenue) and then stay flat as the installed base of public-sector customers keeps renewing. What would make this wrong: if revenue growth stays near 2% while stock-based pay remains around 40% of cash flow, earnings will trend toward the bear case; if the true share count is materially higher than our estimate, per-share values fall proportionally. The company has no debt maturities disclosed as a problem and carries no going-concern warning, but its balance sheet is now more leveraged than a year ago.