IDT Corporation (IDT) screens on the Magic Formula, carries a MagicDiligence Pass rating, and has shown positive relative strength versus the market over the past six months — yet the stock still trades at roughly 17.5x trailing earnings while the S&P 500 sits near 30x. The market's reluctance is understandable at a surface level: the company's biggest revenue segment is a collection of fading telecom products, and the ticker evokes 1990s calling cards more than modern fintech. What the bear framing misses is that IDT has spent the better part of a decade quietly building three genuinely high-margin growth businesses funded by that legacy cash engine, and as of the most recent quarter all three are firing at once.

A Telecom Company That Kept Reinventing Itself

IDT started life in 1990 as International Discount Telephone, a calling-card operation launched by Howard Jonas out of Newark, New Jersey. The company went public in 1996, listed on the NYSE in 2001, and over the following two decades executed a string of spin-offs that returned meaningful value: Genie Energy in 2011, the wireless-spectrum holding company Straight Path in 2013 (later acquired by Verizon for its 5G spectrum assets), and Zedge in 2016. Each spin-off stripped out a distinct business and let the remaining entity focus forward. What remained was a company with a large, declining-revenue calling and mobile top-up operation — and, less visibly, three younger businesses being incubated inside it.

Those three businesses are National Retail Solutions (NRS), BOSS Money, and net2phone. Each targets a market the major technology and telecom platforms have largely ignored.

NRS operates what it describes as the largest POS network serving independent convenience stores, bodegas, liquor stores, and small-format grocers in the United States. At April 30, 2026, the network included 39,300 active terminals, up 10% year-over-year, with 29,200 payment processing accounts, up 14%. The POS platform generates recurring revenue from merchant services, SaaS software fees, display advertising on the 15-inch customer-facing screens, and data licensing. In the most recent quarter, NRS recurring revenue rose 22% to $36 million and the segment's gross margin was 90.2%. NRS's trailing "Rule of 40" score — the SaaS industry's shorthand for the combined total of revenue growth rate plus EBITDA margin — came in at 50, a level associated with high-quality software-driven businesses.

BOSS Money serves the roughly 50 million first- and second-generation immigrants in the United States who send regular remittances abroad. The service operates in 50 destination countries through more than 250,000 payout locations and generates most of its volume through digital channels: the BOSS Money and BOSS Revolution apps. In fiscal 2025 (ended July 31, 2025), BOSS Money revenue grew 29% to $139.8 million. In the third quarter of fiscal 2026 (ended April 30, 2026), digital channel BOSS Money transactions rose 20% year-over-year and digital send volume — the aggregate principal transferred — jumped 40%. Notably, CEO Shmuel Jonas highlighted that the new 1% federal remittance excise tax enacted in the "One Big Beautiful Bill" Act, effective January 2026, actually accelerated IDT's market-share gains: less disciplined operators found the added compliance and pricing burden harder to absorb than IDT did, and customers migrated toward BOSS Money's proven digital infrastructure.

net2phone sells unified communications and contact-center services on a per-seat subscription model, primarily to mid-market businesses in North and South America. In fiscal 2025 it reached 422,000 seats and $87.9 million in subscription revenue. In the latest quarter, seats grew to 441,000 (+6%), subscription revenue rose 12%, gross margin hit 80.6%, and income from operations jumped 76% year-over-year. net2phone has been quietly deploying AI-agent and workforce-intelligence products — net2phone AI Agent and net2phone Coach — that management expects to become a meaningful growth driver in fiscal 2027.

What the Numbers Actually Say

IDT reported fiscal 2025 revenue of $1.23 billion with a 36.2% consolidated gross margin, income from operations of $100.4 million, net income attributable to IDT of $76.1 million, diluted EPS of $3.01, and operating cash flow of $127.1 million. Capital expenditures were $20.8 million, leaving roughly $106 million of free cash flow. Adjusted EBITDA for fiscal 2025 was $131.7 million.

In the nine months of fiscal 2026 ended April 30, 2026, IDT generated $959 million of revenue, $64.9 million of net income attributable to IDT ($2.59 per diluted share), and $46.7 million of operating cash flow. Third-quarter consolidated gross profit margin hit a record 38.8%, driven by the three growth businesses now accounting for the majority of gross profit even though they represent only about 30% of revenue. Management raised full-year fiscal 2026 adjusted EBITDA guidance to $150–$152 million, a midpoint 15% above the fiscal 2025 figure.

At the current price of roughly $57, with approximately 24.9 million diluted shares, the market capitalization is about $1.42 billion. IDT holds $251.4 million in cash and current securities and carries no financial debt, putting the enterprise value at roughly $1.17 billion. Against the fiscal 2026 adjusted EBITDA guidance midpoint of $151 million, that is a forward EV/EBITDA multiple of about 7.7x. Using trailing twelve-month earnings per share of approximately $3.27 (per MarketBeat), the P/E is 17.5x. The S&P 500, by comparison, trades at approximately 30x trailing earnings. A recent Seeking Alpha analysis of IDT's Q3 results framed the stock as trading at 0.9x EV/revenue against a sector peer median closer to 1.9x, and observed that IDT's valuation "should probably still have upside potential" given that its margin profile differs from a typical legacy telecom.

Why the Skepticism Persists

The bear case is not without merit. Traditional Communications, which includes the declining BOSS Revolution calling service and IDT Global wholesale voice, still represents roughly 66% of total revenue and faces structural pressure. BOSS Revolution minutes of use fell 26% in fiscal 2025 and continued declining in fiscal 2026 as wireless carriers bundle international calls and free over-the-top apps displace paid voice.

The remittance excise tax is also a real headwind even if IDT is navigating it better than competitors. Any sustained enforcement crackdown on immigrant communities — IDT's core customer base for both BOSS Revolution and BOSS Money — could weaken transaction volumes and customer acquisition. The company's significant technology and development personnel are based in Belarus, which introduces geopolitical exposure that is hard to hedge. Howard Jonas controls approximately 70% of the combined voting power through IDT's dual-class share structure, limiting the influence other shareholders can exert on governance. And while the dividend was raised again in fiscal 2026 to $0.07 per quarter, the current yield of roughly 0.5% is unlikely to attract income-focused buyers in volume.

None of these risks disappear, but the question is whether they justify pricing IDT at roughly 60% of the market's earnings multiple when its three fastest-growing segments operate with 60–90% gross margins and are each growing north of 10% annually.

What the Case Rests On

IDT does not need Traditional Communications to reverse course to work from here. It needs the three growth segments to maintain current trajectory, gross profit mix to keep shifting, and capital discipline to continue. On that base case, the consolidated free cash flow yield — roughly $106 million on a $1.42 billion market cap — is already running above 7%, and the balance sheet sits entirely unencumbered. IDT has also shown over three decades that it returns capital to shareholders when appropriate, having initiated dividends in 2024 and raised them twice since, while buying back shares at a pace of roughly $19 million in the first nine months of fiscal 2026.

Current IDT read Value
MagicDiligence verdict Pass
Momentum read Positive 6M vs SPY
Why it screens Three high-margin growth segments, strong free cash flow, and zero debt
Main bull point NRS, BOSS Money, and net2phone growing 10–22% with 60–90% gross margins, priced at 17.5x earnings while the market trades at ~30x
Main risk Traditional Communications secular decline, remittance excise tax, geopolitical exposure in Belarus, dual-class voting

IDT does not need to be re-rated as a pure fintech to deliver a better multiple than the market currently assigns. It only needs investors to notice that more than half of its gross profit already comes from three businesses that look nothing like a fading calling-card operator.

If you want to compare IDT with the rest of the current shortlist, go back to the current MagicDiligence screen results.

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