“Key drivers for the incremental tailwinds from this partnership includes access to a larger adviser/distribution network, faster client onboarding and conversion via a more scalable acquisition channel, and improved stickiness from recurring, adviser-led platform flows,” says the analyst.
Meanwhile, iFAST disclosed that the consideration was about $19.6 million and appears to be reasonable according to Tiruchelvam’s estimates, given that the consideration is around 16 times FY2025’s iFAST P/E ratio.
From Tiruchelvam’s perspective, he sees this partnership as a long-term distribution option, not a near-term earnings event. “It expands iFAST’s reach into the adviser channel, supporting faster onboarding and stickier recurring flows,” explains Tiruchelvam.
At the same time, the analyst sees upside coming from deeper platform integration, higher adviser productivity, as well as greater wallet share via cross-sell. It also preserves longer-dated flexibility to deepen the relationship if KPIs are met.
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According to Tiruchelvam, despite the superior earning visibility and balance sheet strength, iFAST remains undervalued and trades at a discount to global digital wealth and platform peers.
Based on his updated forecast, iFAST trades at 17 times forward EV/EBITDA multiple, versus peer average of 23 times multiples. Tiruchelvam views this valuation gap as “unjustified”.
As such, Tiruchelvam raises his target price for iFAST to $13.50, reflecting higher AUA forecasts by incorporating the Financial Alliance partnership and continued confidence in the group’s long-term platform economics.
“The stock offers an attractive risk-reward profile with around 50% upside, supported by recurring revenues, balance-sheet optionality, and improving institutional penetration. The 10% buyback mandate, backed by net cash position above $1.2 billion and strong free cashflow, signals continued confidence in its intrinsic value,” the analyst concludes.
As at 3.00pm, shares in iFast were trading 15 cents higher, or up 1.54%, at $9.87.
