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Ebix Inc.: Is This Total Return Opportunity Worth The Price?


Ebix Inc. provides software development and outsourcing solutions to the insurance industry.

Over the last 10 years, EBIX has done a consistent job compounding capital for shareholders.

This article looks closer at historical operating trends and business traits to determine if this strong performance can continue.

Ebix Inc. (NASDAQ:EBIX) provides insurance software development and outsourcing solutions. Over the last 10 years, EBIX has done a consistent job compounding capital for shareholders. And by looking at the trends in their historical financial statements, I'm curious to see if there are any signs of it slowing down.

This potential long-term return opportunity backed by a solid track record is the reason I wanted to take a closer look at shares of EBIX. Plus, the company has a unique niche that could provide a compelling competitive advantage. If this is the case, I expect it to show up in the financial statements.

And as you might be wondering, will operating results keep pushing the share price higher? For context here's a look at results the last 10 years:

Business Model Overview

As a quick refresher, EBIX provides software and e-commerce services and solutions to the insurance industry. Given the specialized nature of this business, I expect we'll see this characteristic reflected in consistently healthy margins. Plus, the insurance industry as a whole represents a durable business model that I don't believe is unlikely to be disrupted in the near future.

Another factor to consider is that EBIX is by no means a start-up operation. With offices in over 40 countries, EBIX has a global footprint. They've conducted over $100B USD worth of insurance premiums on their platforms. This deep expertise should further show up in consistent operating metrics. The reason this is of interest to me is because I like to look for trends in financial statements. And these qualitative signs of a consistent business give me confidence that the trends are more likely to continue going forward, which can result in attractive opportunities to compound your capital.

Finally, I'm interested...