Intellicheck, Inc. (NasdaqGM:IDN)
Cracking the (Bar)Code of Fraud
Status: Closed | Initiation Price: $2.52 | Result: +108.3%
Coverage ended on July 23, 2025, as communicated through a performance review. The original text is reproduced below for reference:
IDN was pitched in December, at a time when there were no write-ups or X mentions. It was trading near historic lows despite landing major business from toptier customers and benefiting from strong secular tailwinds. Since then, it has started to gain attention from high-profile social media figures. Among other points, the thesis emphasized that rising identity fraud reports, which are highly correlated with IDN’s revenues two quarters ahead, combined with the company’s expansion into new verticals, would lead to reaccelerating growth and inflecting margins. In short, with significant beats across the board starting in Q4, the company finally inflected after years of decelerating SaaS growth, even without Meta, the unnamed multinational social media company I suspect IDN will eventually sign. However, while identity fraud reports continue to rise, implying growth might pick up in the back half of the year, valuation has been stretched amid significant retail softness. The upside is still present, but no longer skewed, especially if pricing can’t continue offsetting declines in scanning volumes.
IDN is a ~$50mm company securing contracts with some of the world’s largest corporations, all while being surrounded by a moat wider than the Grand Canyon. With 90%+ margins and a clear path for reaccelerated growth, it’s hard to see how this stock won’t exceed expectations. But let me first introduce you to the idea.
Data breaches are surging. The recent United Healthcare breach exposed data on roughly a third of all Americans. For ~$20, this stolen data is available on the dark web, and for just ~$40 more, you can get a visually undetectable by law enforcement fake ID. But who cares about manual checks anymore, right? Surely computers can catch it all.
Wrong. Every competitor relies on OCR templating, a method with detection rates ranging from 65% to 75%. Claims of higher accuracy? Don’t trust them. In contrast, IDN has a ~99.9% detection rate, thanks to its longstanding relationships with the AAMVA and DMVs.
So, why does this opportunity exist? Growth has decelerated, but I've examined the causes and uncovered a relationship that dictates an imminent reversal. Importantly, there is a hard catalyst too. During onboarding, strict NDAs prevent IDN from disclosing the identity of new clients, but sometimes the company gives some clues.
Take 2020, for example. IDN secured a contract with a multinational financial services company that "provides innovative payment, travel, and expense management solutions for individuals and businesses of all sizes." A quick copy-paste into Google revealed it was American Express. By April 2021, the stock had quadrupled.
Now, the multinational company IDN signed a contract with is not a card issuer, but "one of the largest social media platforms in the world." The setup looks familiar, but will history repeat?
Scroll down to download the full report and model.
