Ziff Davis (ZD, Financial) reported its first-quarter revenue at $328.6 million, surpassing analysts' expectations of $322.76 million. The performance exceeded the company's internal targets, according to Vivek Shah, CEO of Ziff Davis. He highlighted the company's achievements in revenue growth acceleration, strategic mergers and acquisitions, and an active share repurchase program as positive indicators for the remainder of the year.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Ziff Davis Inc (ZD, Financial) is $54.83 with a high estimate of $80.00 and a low estimate of $35.00. The average target implies an upside of 69.34% from the current price of $32.38. More detailed estimate data can be found on the Ziff Davis Inc (ZD) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, Ziff Davis Inc's (ZD, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Ziff Davis Inc (ZD, Financial) in one year is $79.46, suggesting a upside of 145.4% from the current price of $32.38. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Ziff Davis Inc (ZD) Summary page.
ZD Key Business Developments
Release Date: February 25, 2025
- Q4 2024 Revenue: $412.8 million, a growth of 5.9% from the prior year period.
- Q4 2024 Adjusted EBITDA: $171.8 million, reflecting 2.5% growth.
- Q4 2024 Adjusted EBITDA Margin: 41.6%.
- Q4 2024 Adjusted Diluted EPS: $2.58, a 10.7% increase from Q4 2023.
- Fiscal Year 2024 Revenue: $1,401.7 million, an increase of 2.8% from fiscal year 2023.
- Fiscal Year 2024 Adjusted EBITDA: $493.5 million, a growth of 2.3% from fiscal year 2023.
- Fiscal Year 2024 Adjusted EBITDA Margin: 35.2%.
- Fiscal Year 2024 Adjusted Diluted EPS: $6.62, a 6.9% increase from fiscal year 2023.
- Free Cash Flow for 2024: Over $283 million, with Q4 2024 free cash flow of $131 million.
- Advertising and Performance Marketing Revenue Growth: 10.6% in Q4 2024 and 4.1% for fiscal year 2024.
- Subscription and Licensing Revenue Growth: Approximately 1% in Q4 2024.
- Cash and Cash Equivalents: $506 million as of the end of Q4 2024.
- Long-term Investments: Approximately $158 million as of the end of Q4 2024.
- Gross Leverage: 1.8 times trailing 12 months adjusted EBITDA.
- Net Leverage: 0.7 times, or 0.4 times including long-term investments.
- Capital Allocation in 2024: Over $225 million for acquisitions and more than $185 million for share repurchases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ziff Davis Inc (ZD, Financial) reported a 5.9% increase in revenue and a 10.7% rise in adjusted diluted EPS for Q4 2024, marking the best revenue growth quarter of the year.
- The company is implementing a new segment reporting structure, transitioning from two to five reportable segments, which is expected to provide greater transparency and align with their strategy.
- Ziff Davis Inc (ZD) has a strong balance sheet with $506 million in cash and cash equivalents, and significant leverage capacity, supporting their M&A strategy.
- The company has seen success with AI initiatives, such as the AI-powered features in the Lose It app and the AI job analyzer by Health e-Careers, which have increased engagement and job applications.
- Ziff Davis Inc (ZD) plans to accelerate revenue growth in 2025, with expectations of improved performance across all segments, particularly in Tech and Shopping, Health and Wellness, and Connectivity.
Negative Points
- Q4 2024 revenues fell short of expectations, with a $10 million shortfall attributed to underperformance in the Humble Games Publishing and Connectivity businesses.
- The Connectivity segment did not achieve the expected level of large deal activity in Q4, impacting revenue recognition.
- The company faced indirect tax accruals that negatively impacted Q4 revenue performance.
- Ziff Davis Inc (ZD) experienced a decline in the Cybersecurity and Martech segment revenues by almost 3% in 2024, although this was an improvement over the previous year's decline.
- The company is deprioritizing the ad business within the Connectivity segment, which may impact short-term revenue growth.
