Key Takeaways
- AI-powered products and investments in privacy-compliant ad technology strengthen Criteo’s competitive edge, driving client retention, operational efficiency, and market share gains.
- Strong financial discipline and shareholder-centric strategies enable long-term growth investment and capital return, enhancing flexibility and future earnings potential.
- High client concentration, regulatory threats, slow new product traction, rising competition, and weak ad spending combine to constrain growth and profitability prospects.
Catalysts
About Criteo- A technology company, provides marketing and monetization services and infrastructure on the open internet in North and South America, Europe, the Middle East, Africa, and the Asia-Pacific.
- Criteo is positioned to capitalize on the accelerating shift of marketing budgets toward global digital advertising, underpinned by ongoing growth in e-commerce and increased demand for sophisticated performance marketing solutions. This expands Criteo’s total addressable market and supports sustained top-line revenue growth as more brands and retailers prioritize measurable, data-driven online marketing.
- The rollout of AI-powered products such as Commerce Go and enhanced automation tools enables both large and small advertisers to plan, buy, and optimize campaigns more efficiently. This innovation is likely to accelerate client onboarding, drive higher retention, reduce cost to serve, and increase wallet share, directly supporting both revenue growth and operating margin expansion in future periods.
- Criteo’s leadership in Commerce Media and Retail Media, evidenced by a broad and growing global retailer base and strategic partnerships with agencies and major clients like Office Depot and ODP Business Solutions, positions it to capture market share in high-growth verticals. This concentration in rapidly expanding areas of digital advertising is expected to drive faster revenue growth relative to the broader market.
- With substantial investments in first-party data infrastructure and privacy-compliant ad technology, Criteo is well ahead in adapting to the ongoing industry transition away from third-party cookies. This positions the company to command premium pricing, retain clients, and maintain or even improve net margins as advertisers seek partners who can ensure audience addressability and closed-loop measurement in a privacy-first landscape.
- Robust free cash flow generation, a commitment to disciplined capital allocation, and an ongoing share repurchase program provide tangible support to earnings per share growth. This financial strength and focus on shareholder returns gives Criteo the flexibility to invest for long-term growth, pursue value-accretive acquisitions, and return capital to investors, all of which are likely to positively impact earnings and share value over time.
Criteo Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- This narrative explores a more optimistic perspective on Criteo compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
- The bullish analysts are assuming Criteo's revenue will decrease by 15.1% annually over the next 3 years.
- The bullish analysts assume that profit margins will increase from 7.4% today to 15.1% in 3 years time.
- The bullish analysts expect earnings to reach $179.3 million (and earnings per share of $3.13) by about July 2028, up from $142.3 million today. The analysts are largely in agreement about this estimate.
- In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 16.7x on those 2028 earnings, up from 8.7x today. This future PE is lower than the current PE for the US Media industry at 20.2x.
- Analysts expect the number of shares outstanding to decline by 5.08% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 7.25%, as per the Simply Wall St company report.
Criteo Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Client concentration risk remains high as evidenced by the largest retail media client unexpectedly reducing managed services and demand generation with Criteo, a move expected to cause a $75 million decline in retail media revenue over the next year, indicating vulnerability to further in-housing or client consolidation that could weaken future revenues and margin stability.
- The company’s optimism regarding Google’s postponement of third-party cookie deprecation only defers, not eliminates, the secular threat posed by privacy regulations and cookie loss, meaning Criteo’s core retargeting business still faces long-term declines in addressable audience and revenue unless alternative data and targeting solutions quickly ramp.
- Despite ongoing investments in AI and new channels, early-stage self-service and Retail Media offerings are only gradually gaining traction, resulting in muted top-line growth for at least the next year, as shown by management providing low single-digit revenue growth guidance for 2025 and signaling that scale benefits may not materialize fast enough to offset legacy business erosion.
- Intensifying competition from walled gardens and other major ad tech competitors, as well as the rising sophistication of in-house retail media and data analytics teams at Criteo’s clients, threatens the company’s ability to capture incremental demand, compressing pricing power and ultimately constraining margin expansion and future earnings growth.
- Persistent macroeconomic headwinds and reduced ad budgets in discretionary verticals, evidenced by softening trends in major segments like fashion and US retail, could limit Criteo’s ability to achieve robust top-line growth even as new clients are onboarded, directly pressuring both revenue and earnings in the medium-to-long term.
Valuation
How have all the factors above been brought together to estimate a fair value?- The assumed bullish price target for Criteo is $54.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Criteo's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
- However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $54.0, and the most bearish reporting a price target of just $27.0.
- In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $1.2 billion, earnings will come to $179.3 million, and it would be trading on a PE ratio of 16.7x, assuming you use a discount rate of 7.3%.
- Given the current share price of $23.21, the bullish analyst price target of $54.0 is 57.0% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
How well do narratives help inform your perspective?
Disclaimer
AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.