TBLA: Future Margin Expansion Will Drive Upside As Growth Visibility Improves

Analysts have modestly raised their price target on Taboola.com to approximately $4.80 from about $4.50, citing slightly stronger long term growth and margin assumptions, even as some Street research continues to emphasize the need for clearer double digit topline potential.

Analyst Commentary

Bullish analysts highlight that the modest price target increase reflects improving confidence in Taboola's long term growth profile and margin expansion, even if near term expectations remain restrained.

Bullish Takeaways

Upward revisions to the price target suggest growing conviction that Taboola can gradually improve profitability and scale its platform over time.
Expectations for mid single digit topline growth in 2025 and 2026 provide a baseline that, if exceeded, could justify further multiple expansion.
Incremental visibility into operating leverage and margin improvement supports a more constructive view on long term value creation.
The absence of a major negative thesis or structural concern leaves room for sentiment to improve if execution outperforms current forecasts.

Bearish Takeaways

Bearish analysts emphasize that current forecasts for mid single digit revenue growth are not sufficient to support a more aggressive valuation re rating.
Lack of clear line of sight to sustainable double digit topline growth limits enthusiasm around upside scenarios for the shares.
Limited visibility into near term catalysts raises the risk that the stock could remain range bound as investors wait for evidence of faster growth.
The decision by some firms to withhold a formal price target underscores lingering uncertainty around the pace and durability of Taboola's growth trajectory.

What's in the News

Announced a new partnership with LG Ad Solutions to launch Performance Enhancer, connecting premium CTV exposure with measurable digital outcomes across global channels. (Client announcement)
BuzzFeed Asia selected Taboola's DeeperDive Gen AI answer engine for launch in Singapore, Malaysia, and the Philippines, aiming to boost engagement and create new on site monetization opportunities. (Client announcement)
Raised full year 2025 revenue guidance to a range of $1.914 billion to $1.932 billion, indicating increased confidence in projected growth. (Corporate guidance raised)
Provided fourth quarter 2025 revenue guidance of $532 million to $542 million, outlining near term expectations for topline performance. (Corporate guidance)
Repurchased over 10 million shares in the latest tranche, bringing total buybacks under the May 2023 authorization to about 92 million shares, or nearly 28% of shares outstanding. (Buyback update)

Valuation Changes

Fair Value: increased slightly from $4.50 to $4.80, reflecting modestly higher expectations for long term value.
Discount Rate: edged down marginally from 8.61% to 8.61%, suggesting a slightly lower perceived risk profile or cost of capital.
Revenue Growth: ticked up from approximately 6.11% to about 6.18%, indicating a minor uplift in long term growth assumptions.
Net Profit Margin: improved modestly from roughly 1.63% to around 1.65%, signaling a small upgrade to margin expectations.
Future P/E: moved up from about 36.3x to roughly 38.4x, implying a slightly higher valuation multiple on forward earnings.

New platform launches and global partnerships are expanding Taboola's addressable market, driving revenue growth beyond traditional native ads.
Strong AI-driven targeting and first-party data position Taboola well as privacy changes shift advertisers toward open-web alternatives, supporting higher margins and earnings growth.
Heavy reliance on publisher partnerships and new platform adoption, combined with macro risks and advertiser scrutiny, threatens growth, profitability, and long-term market opportunity.

Catalysts

About Taboola.com

Operates an artificial intelligence-based algorithmic engine platform in Israel, the United States, the United Kingdom, Germany, and internationally.What are the underlying business or industry changes driving this perspective?

The launch of Realize, Taboola's new performance advertising platform, is enabling entry into a much larger pool of display and social ad budgets, positioning the company to capture incremental revenue growth outside of traditional native ad formats. This is expected to materially expand the addressable market and drive a return to double-digit revenue growth in the coming years.
The global trend of increasing digital content consumption, paired with Taboola's strategic partnerships with device OEMs (e.g., Samsung, Xiaomi) via Taboola News, is creating new high-value advertising touchpoints. This growing and unique supply, especially pre-browser and pre-social usage, is likely to support sustained revenue acceleration and provide additional operating leverage.
Taboola's platform advantages-namely, deep AI-driven targeting and robust first-party data from premium publisher partners-position it strongly as privacy norms and third-party cookie deprecation shift advertiser demand toward contextual, native, and open-web solutions. This should support higher net margins as advertisers seek effective alternatives to social and search walled gardens.
Growing the number of scaled advertisers (up 9% YoY) and early success in onboarding new customers with Realize illustrate increasing customer stickiness and a robust pipeline for future growth. The expanding base of high-spend advertisers is expected to lift both revenue and long-term earnings.
Significant share buybacks (12% of shares repurchased in H1 2025, with expanded authorization) signal management's conviction in long-term value creation and should materially boost earnings per share as core revenues and margins recover.

Taboola.com Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Taboola.com's revenue will grow by 6.4% annually over the next 3 years.
Analysts assume that profit margins will increase from 0.7% today to 1.7% in 3 years time.
Analysts expect earnings to reach $37.6 million (and earnings per share of $0.12) by about September 2028, up from $13.6 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 33.7x on those 2028 earnings, down from 73.5x today. This future PE is greater than the current PE for the US Interactive Media and Services industry at 16.9x.
Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.46%, as per the Simply Wall St company report.

Taboola.com Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Macroeconomic and geopolitical risks-such as tariff uncertainty and declining China revenue, which currently accounts for about 5% of Taboola's revenue-could persist or worsen, posing ongoing headwinds to international revenue growth and opening the company to geographic concentration risk. (Revenue)
The company's current core growth rate of only 3%–5% (excluding the new Realize platform) is far below historical double-digit performance, and the ability to re-accelerate growth is heavily contingent on successful adoption of Realize, which is still very early-stage and unproven at scale, introducing execution risk and uncertainty about whether it can materially boost revenue. (Revenue and earnings)
Although management emphasizes the resilience of Taboola's publisher network against search-traffic displacement by LLMs and generative AI, there remains significant long-term risk that continued shifts in consumer content discovery (away from the OpenWeb toward AI-powered answers, walled gardens, and direct platforms) could erode the open web's share of digital traffic and limit Taboola's addressable market over time. (Revenue and long-term TAM)
Taboola's growth strategy remains highly dependent on ongoing partnerships with major publishers and device OEMs; any shift in publisher monetization preferences, further concentration among walled garden ad platforms, or heightened competition from large tech incumbents or alternative recommendation engines could compress take rates and margins or lead to loss of key distribution, weighing on net margins and earnings stability. (Net margins and earnings)
Rising advertiser scrutiny-exemplified by tepid (2%) budget growth per existing scaled client and questions about the efficacy of up-selling display budgets-could reflect difficulty in meaningfully capturing greater share-of-wallet from advertisers and challenges differentiating Taboola's performance in a highly competitive and commoditizing ad tech market; this could put continued pressure on growth and profitability. (Revenue and earnings growth)

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $4.167 for Taboola.com based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.2 billion, earnings will come to $37.6 million, and it would be trading on a PE ratio of 33.7x, assuming you use a discount rate of 8.5%.
Given the current share price of $3.37, the analyst price target of $4.17 is 19.1% 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.

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Disclaimer

AnalystConsensusTarget 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 AnalystConsensusTarget 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 AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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