Citi analyst Ygal Arounian maintained a Hold rating on Ziff Davis, Inc. (ZD – Research Report) today and set a price target of $52.00.
Ygal Arounian has given his Hold rating due to a combination of factors impacting Ziff Davis, Inc. While there are signs of improvement in some areas, these are counterbalanced by challenges in others, leading to mixed results for the fourth quarter and fiscal year 2025 guidance. The company’s management is optimistic about returning all five segments to growth by 2025, but the top-line guidance fell short of expectations due to strategic decisions, particularly in the B2B Tech segment.
Despite the attractive valuation at approximately 4.5x 2026 EBITDA, Arounian believes a clear catalyst is necessary to unlock this value. Additionally, there is a potential risk from Generative AI Search, which could pose an overhang despite no current impact on traffic or click-through rates. The advertising growth forecast is below market expectations, partly due to a strategic shift towards profitability in the B2B Tech strategy, which is expected to affect ad revenue growth in 2025.
In another report released yesterday, Barclays also maintained a Hold rating on the stock with a $48.00 price target.