My new stock pick: Intelligent Systems Corporation (INS stock) analysis

As readers of my blog may already know I primarily focus on finding stocks that may show accelerating earnings growth in the next few years. At this moment I look at the forward PE ratios and PEG (price-to-earnings growth) score.

This time my attention was piqued by Intelligent Systems Corporation (INS stock).

The price for INS stock at the moment of the analysis is $33.72.

The price of the stock at the moment you are reading the article is below:

Below is my stock analysis of Intelligent Systems Corporation (INS stock)

Why did Intelligent Systems Corporation (INS stock) pique my interest?

1. The chart above. Looks like one of those Elliot Wave charts with a small bump in the beginning and another run after a bit of retraction.

2. Looking closer at the chart for the most recent period, Intelligent Systems Corporation (INS) is trying to break through one of the channel lines. Now, there are 2 of those on the chart. I will see if it breaks through the upper one at which point I will buy more.

3. The company has just released Q2 2020 results and beat estimates by 10%. Now, this is not much, but it constantly delivers strong EPS results, which is positive.

Intelligent Systems Corporation (INS stock) profile

Intelligent Systems Corp. engages in the management of emerging technology companies. It operates through the CoreCard Software, Inc. and affiliate companies, which involves in the design, development, and marketing of software solutions to corporations, financial institutions, retailers, and processors to manage credit and debit cards, prepaid cards, private label cards, fleet cards, loyalty programs, and accounts receivable and small loan transactions. The company was founded in 1973 and is headquartered in Norcross, GA.

Intelligent Systems Corporation (INS stock) growth predictions and valuation

The 2 analysts covering the stock estimate the INS stock will deliver $1.895 in EPS for 2021 and $2.3 for 2022. This provides a forward PE of 18 for 2021 and 14 for 2022.

If it continues to grow at least 25% afterward, this represents the annual earnings growth of 36% for the next 5 years. This gives the stock PEG ratio of below 1 which is my primary alert for BUY decision.

Analyst ratings for Intelligent Systems Corporation (INS stock)

The analysts are giving the BUY rating to INS stock with a target price of $50.5 which is 50% above the current price.

Source: https://www.marketwatch.com/investing/stock/ins/analystestimates

The company has no debt. It was growing in sales very well until 2019. Q1 revenues declined a bit, but in Q2 they resumed growth.