Ebix: Deteriorating Margins And ROIC Leave Me Worried

Summary

• Given the poor performance of its stock price, as seen in the first chart of this article, one might expect that its financial performance has been similarly poor.
• And well, one might be right in presuming that.
• While revenues have nearly tripled over the last 5 years (an impressive feat) earnings have not followed suit.
• ROIC has been cut to just a third of what it was a decade ago, now yielding just less than 6%. I believe such performance is subpar.

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Ebix (EBIX) is a medium-sized technology firm that provides software development and SaaS services to several industries including the insurance, financial, and healthcare industries. EbixCash and its insurance exchanges are Ebix's largest revenue channels, when combined, they account for 92% of

Analyst’s Disclosure:I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.