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Perion Network Ltd (PERI)
:PERI
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Perion Network
(NASDAQ:PERI)67Neutral
Positive Factors
Business Strategy
Perion is believed to be taking the right steps to improve its business, offering potential for future growth.
Financial Health
The company finished Q3 with $384M cash and no debt, showing strong financial health and liquidity.
Negative Factors
Financial Performance
PERI missed estimates for 4Q24 with significant year-over-year declines in gross revenues, net revenues, and adjusted EBITDA.
Perion Network (PERI) vs. S&P 500 (SPY)
Market Cap
$387.44M
Dividend YieldN/A
Average Volume (3M)471.51K
Price to Earnings (P/E)31.4
Beta (1Y)1.22
Revenue Growth-32.95%
EPS Growth-89.11%
CountryUS
Employees561
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)0.26
Shares Outstanding47,307,000
10 Day Avg. Volume478,493
30 Day Avg. Volume471,508
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.53
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.00Price Target Upside22.10% Upside
Rating ConsensusHold
Number of Analyst Covering4
Perion Network Business Overview & Revenue Model
Company DescriptionPerion Network Ltd. is a diversified technology company that specializes in digital advertising. Operating primarily through its three main business segments—Advertising, Search Monetization, and Social Media—Perion provides a comprehensive suite of solutions designed to optimize the performance of digital advertising campaigns. Its flagship products and services include data-driven advertising platforms, search monetization solutions, and social media management, all aimed at enhancing engagement and delivering high ROI for advertisers across various channels.
How the Company Makes MoneyPerion Network makes money through its diversified digital advertising solutions. The company's revenue model is primarily based on its advertising and search monetization segments. In the advertising segment, Perion generates revenue by providing technology solutions that help advertisers and publishers optimize their digital campaigns across multiple platforms, including mobile, video, and social media. This involves programmatic advertising and partnerships with key industry players to deliver targeted and efficient ad placements. The search monetization segment contributes to revenue by partnering with leading search engines to enhance search capabilities and drive traffic, thus earning a share of search-related advertising revenues. Additionally, through its social media solutions, Perion generates revenue by offering tools and services that allow brands to manage and optimize their social media presence and advertising efforts. Significant partnerships with tech giants and a strong network of advertisers and publishers further bolster the company's revenue streams.
Perion Network Financial Statement Overview
Summary
Perion Network demonstrates strong financial fundamentals with robust revenue growth and a strong balance sheet marked by low leverage. However, significant challenges include a decline in EBIT and free cash flow, which are critical for ongoing profitability and cash flow management.Income Statement
Perion Network has demonstrated robust revenue growth, with a notable increase from $328 million in 2020 to $743 million in 2023. The gross profit margin has remained strong, consistently exceeding 35% in recent years. However, there was a significant drop in EBIT in 2024, turning negative, which impacts the overall profitability. Despite this, the company shows resilience with a solid EBITDA margin above 20% in 2023, indicating efficient core operations.82
Very Positive
Balance Sheet
The company's balance sheet is strong, with a favorable debt-to-equity ratio consistently below 0.1, indicating low leverage. Stockholders' equity has steadily increased, reflecting financial stability and growth potential. The equity ratio has improved, demonstrating the company's effective management of assets. A high cash reserve supports liquidity, although there is a slight increase in total liabilities over the years.78
Positive
Cash Flow
Perion Network exhibits a robust cash flow position, with operating cash flow showing a positive trend. Despite fluctuations in capital expenditures, free cash flow remains positive and stable. However, there was a sharp decline in free cash flow from $154 million in 2023 to $113 thousand in 2024, raising concerns about future cash generation. Nevertheless, the company has maintained a healthy operating cash flow to net income ratio.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 498.29M | 743.15M | 640.26M | 478.50M | 328.06M | Gross Profit |
| 165.45M | 272.38M | 237.25M | 165.28M | 107.96M | EBIT |
| -3.04M | 116.74M | 109.16M | 45.90M | 12.25M | EBITDA |
| 21.83M | 152.00M | 127.50M | 55.80M | 22.18M | Net Income Common Stockholders |
| 12.61M | 117.41M | 99.22M | 38.71M | 10.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 373.33M | 472.68M | 429.63M | 321.65M | 60.36M | Total Assets |
| 916.45M | 1.08B | 870.22M | 713.23M | 358.68M | Total Debt |
| 22.30M | 7.65M | 11.48M | 13.39M | 30.55M | Net Debt |
| -133.93M | -179.96M | -164.75M | -91.06M | -17.11M | Total Liabilities |
| 196.69M | 359.12M | 287.08M | 246.27M | 174.56M | Stockholders Equity |
| 719.76M | 718.15M | 583.13M | 466.96M | 184.12M |
| Cash Flow | Free Cash Flow | |||
| 113.00K | 154.65M | 121.07M | 70.57M | 21.54M | Operating Cash Flow |
| 6.94M | 155.46M | 122.12M | 71.11M | 22.05M | Investing Cash Flow |
| 62.60M | -133.35M | -46.82M | -243.47M | -8.81M | Financing Cash Flow |
| -100.91M | -10.82M | -3.26M | 229.05M | -4.05M |
Perion Network Technical Analysis
Negative
8.19
Price Trends
8.83
Negative
8.66
Negative
8.78
Negative
Market Momentum
-0.25
Positive
37.81
Neutral
50.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PERI, the sentiment is Negative. The current price of 8.19 is below the 20-day moving average (MA) of 8.79, below the 50-day MA of 8.83, and below the 200-day MA of 8.78, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 37.81 is Neutral, neither overbought nor oversold. The STOCH value of 50.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PERI.
Perion Network Risk Analysis
Perion Network disclosed 67 risk factors in its most recent earnings report. Perion Network reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Perion Network Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.87B | 94.41 | 3.10% | ― | 7.82% | ― | |
67 Neutral | $387.44M | 31.44 | 1.75% | ― | -32.95% | -89.11% | |
67 Neutral | $474.11M | 42.11 | 4.36% | ― | 9.08% | 43.58% | |
66 Neutral | $308.72M | ― | -101.69% | ― | -15.51% | -54.09% | |
63 Neutral | $32.20B | 83.16 | 15.37% | ― | 25.63% | 118.49% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
42 Neutral | $101.64M | ― | -186.12% | ― | -3.00% | 50.03% |
* Communication Services Sector Average
Performance Comparison
PERI
Perion Network
8.19
-14.38
-63.71%
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13.10
1.75
15.42%
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Digital Turbine
2.94
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-5.47%
TTD
Trade Desk
64.91
-16.54
-20.31%
CDLX
Cardlytics
2.00
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PUBM
PubMatic
9.77
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Perion Network Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -16.00% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted the strategic shift towards the PerionOne platform, emphasizing growth in key areas like digital out-of-home, CTV, and retail media. However, significant challenges were noted in the form of revenue decline and the non-renewal of a major contract, suggesting mixed results overall.Highlights
Introduction of PerionOne Strategy
The PerionOne strategy unifies all technologies and brands under a single AI-driven advertising platform, aiming to optimize campaigns across all channels and drive efficiency.
Growth in Key Segments
Digital out-of-home grew by 50%, CTV by 30%, and retail media by 62% year over year, significantly surpassing the market growth rates of 10%, 23%, and 20%, respectively.
Strengthened Leadership Team
Addition of industry veterans including Steven Yap as Chief Revenue Officer, Kenny Lau as Chief Product Officer, and Mina Nagib as Chief Technology Officer to drive the PerionOne strategy.
Positive Financial Metrics
The company ended 2024 with positive operating cash flow, met revised guidance for revenue and EBITDA, and maintained a strong balance sheet with $373.3 million in net cash.
Lowlights
Significant Revenue Decline
Total revenue for the full year 2024 declined by 33% year over year, primarily due to a decrease in search revenue and weaknesses in open web video and standard ad formats.
Non-Renewal of Microsoft Bing Contract
The contract with Microsoft Bing ended on December 31, 2024, impacting search advertising revenue stability.
Adjusted EBITDA Decrease
Adjusted EBITDA for 2024 was $50.9 million, a decrease from $169.1 million in 2023, although cost reductions and efficiency measures helped moderate the decline.
Company Guidance
During the Perion Network Ltd. fourth quarter and full year 2024 earnings call, CEO Tal Jacobson and CFO Elad Tzubery provided detailed guidance and insights into the company's strategic transformation under the new PerionOne strategy. The company reported a full-year revenue of $498.3 million, a 33% decrease year-over-year, with adjusted EBITDA of $50.9 million, representing a 10% margin. For 2025, Perion anticipates revenue between $400 to $420 million and adjusted EBITDA of $40 to $42 million, highlighting an expected 22% adjusted EBITDA to contribution ex-stock margin. The call emphasized the impressive growth rates of their core segments: digital out-of-home grew by 50% year-over-year, CTV by 30%, and retail media by 62%, all surpassing industry averages. Perion's transition to PerionOne aims to consolidate all technologies under one platform, enhancing operational efficiency and capitalizing on high-growth, high-margin opportunities. This strategic shift, alongside leadership additions, is expected to improve sales and marketing efficiency, while leveraging advanced AI to optimize campaign execution. The company also announced a focus on strengthening its balance sheet with $373.3 million in cash and continued share repurchase efforts, having bought back 5.2 million shares for $46.9 million.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.