Perion Network (NASDAQ:PERI) plunged in trading after the advertising technology company lowered its second-quarter and FY24 guidance. The company stated that in the second quarter, it expects revenues in the range of $106 million to $108 million, with adjusted EBITDA likely to be between $6.5 million and $7.5 million. For reference, analysts had forecast Q2 revenues of $120.05 million.
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In FY24, PERI estimates its revenues to be in the range of $490 million to $510 million, compared to consensus estimates of $600.9 million. The company anticipates that adjusted EBITDA will be between $48 million and $52 million.
Reason for Perion’s Lowered Outlook
The company stated that it had been notified by Microsoft (NASDAQ:MSFT) Bing of its decision to exclude several ad publishers from its search distribution marketplace. As a result, Perion expects that search revenues from Microsoft Bing will likely represent less than 5% of the company’s revenue in the second half of this year.
Additionally, the company is observing declining revenue from standard video and display formats due to market conditions and a shift to higher premium ad formats.
Is PERI Stock a Good Buy?
Analysts remain cautiously optimistic about PERI stock, with a Moderate Buy consensus rating based on two Buys and three Holds. Year-to-date, PERI has plunged by more than 50%, and the average PERI price target of $15.60 implies an upside potential of 26.6% from current levels.
