What happened
Shares of Ebix (EBIX) gained 31.4% in March 2021, according to data from S&P Global Market Intelligence. The financial technology company, which sells software used to manage insurance, finance, and healthcare businesses, rebounded from a traumatic February drop when it picked a new auditor and announced a preliminary filing date for its belated annual report.
So what
Ebix shares plunged 54% lower in the space of two days near the end of February when the expected fourth-quarter report was replaced by a guidance update and an accounting scandal. The company's official accounting firm, RSM US, resigned due to incomplete documentation for some funny-looking gift card transactions in India. Ebix picked KG Somani to replace RSM. The new firm is a well-respected accounting network based in New Delhi, with a five-decade history of auditing local banks and insurance companies. Share price started climbing on the news and had gained 35% a week later.
Image source: Getty Images.
Now what
The completed fourth-quarter and annual reports are expected on or around April 20. The Street consensus calls for earnings near $0.79 per share on sales in the neighborhood of $188 million for the quarter, compared to earnings of $0.81 per share and revenue of $146 million in the year-ago quarter. It's unclear how significant the Indian gift card restatements might be.
So Ebix's March jump was more of a partial return to normalcy than a triumphant victory march. The highly volatile stock has now gained 158% in 52 weeks but it also trades 57% lower from a three-year perspective. That delayed filing should answer a lot of questions about Ebix's financial health. It just remains to be seen whether those answers are any good or not.
