Goldman Sachs lowers Alkami Technology stock price target on mixed Q3 results

Alkami Technology Inc. (ALKT) reported mixed Q3 2025 results, with revenue of $113 million slightly missing expectations and an EPS of -$0.14 significantly below forecasts, contributing to a year-to-date stock decline exceeding 40%. Despite the revenue shortfall, attributed to implementation timing, the company surpassed adjusted EBITDA forecasts and achieved a record 13 banking implementations. Following these results, Goldman Sachs lowered its price target to $26 from $29 while maintaining a Neutral rating, and Citizens reduced its target to $40 from $46. Alkami also revised its FY25 revenue guidance down by $2 million but raised its adjusted EBITDA guidance by $4 million, reaffirming expectations for 22-23% organic ARR growth and analysts' predictions for profitability in 2025.

Analysis

Alkami Technology (ALKT) reported mixed Q3 2025 results, with revenue of $113 million slightly missing forecasts by $0.58 million and an EPS of -$0.14 significantly below the anticipated $0.12. This contributed to the stock's year-to-date decline exceeding 40%, trading at $21.99, well below its 52-week high of $42.29. Goldman Sachs responded by lowering its price target to $26 from $29, maintaining a Neutral rating, while Citizens also reduced its target to $40 from $46.

Despite the revenue shortfall, attributed to implementation timing, Alkami exceeded adjusted EBITDA forecasts and achieved a record 13 online banking implementations in Q3. Management revised FY25 revenue guidance down by approximately $2 million at the midpoint due to resource reallocation towards banking client implementations. However, the company simultaneously raised its FY25 adjusted EBITDA guidance by $4 million at the midpoint, citing efficiency improvements and reaffirming expectations for 22-23% organic Annual Recurring Revenue (ARR) growth.

Alkami maintains a healthy financial position with a current ratio of 2.68, indicating strong liquidity. While the company remains unprofitable with a negative EBITDA of $38.75 million over the last twelve months, analysts predict it will achieve profitability in 2025. The leadership change, with Cassandra Hudson replacing Bryan Hill as CFO, also signals potential strategic shifts.

Key Decisions for Investors

• Investors should closely monitor Alkami's execution on its revised FY25 adjusted EBITDA guidance and sustained 22-23% organic ARR growth, as these are key indicators for achieving projected profitability in 2025.
• Given the significant year-to-date stock decline and analyst price target reductions, a thorough re-evaluation of Alkami's valuation metrics is warranted, considering the company's strong liquidity and record implementation pace against its current unprofitability.
• Assess the strategic implications of the CFO transition and its potential impact on financial management and operational efficiency, particularly as the company navigates its path to profitability.