Outbrain (NasdaqGS:OB) - Share price, News & Analysis

Q: What is the Fair Price of OB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

OB ($6.14) is trading below our estimate of [[fair value]] ($8.77)

OB fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	4/6
Past Performance	0/6
Financial Health	5/6
Dividends	0/6

OB Stock Overview

Outbrain Inc., together with its subsidiaries, operates an online content recommendation platform worldwide.

Rewards

Trading at 30% below our estimate of its fair value

Earnings are forecast to grow 31.47% per year

Revenue grew by 27.4% over the past year

Risk Analysis

Large one-off items impacting financial results

Profit margins (0.5%) are lower than last year (1.9%)

Shareholders have been diluted in the past year

Outbrain Competitors

trivago

NasdaqGS:TRVG

US$593.5m

Sohu.com

NasdaqGS:SOHU

US$638.3m

Yalla Group

NYSE:YALA

US$662.8m

Cars.com

NYSE:CARS

US$881.6m

Price History & Performance

Summary of all time highs, changes and price drops for Outbrain
Historical stock prices
Current Share Price	US$6.14
52 Week High	US$20.29
52 Week Low	US$4.60
Beta	0
1 Month Change	17.63%
3 Month Change	-28.02%
1 Year Change	-68.38%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-69.30%

Recent News & Updates

Jul 22

An Intrinsic Calculation For Outbrain Inc. (NASDAQ:OB) Suggests It's 32% Undervalued

Does the July share price for Outbrain Inc. ( NASDAQ:OB ) reflect what it's really worth? Today, we will estimate the...

Shareholder Returns

	OB	US Interactive Media and Services	US Market
7D	9.6%	2.2%	1.0%
1Y	-68.4%	-31.3%	-12.9%

Return vs Industry: OB underperformed the US Interactive Media and Services industry which returned -31.3% over the past year.

Return vs Market: OB underperformed the US Market which returned -12.9% over the past year.

Price Volatility

Is OB's price volatile compared to industry and market?
OB volatility
OB Average Weekly Movement	11.0%
Interactive Media and Services Industry Average Movement	11.0%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.2%

Stable Share Price: OB is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: OB's weekly volatility (11%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2006	1,016	Yaron Galai	https://www.outbrain.com

Outbrain Inc., together with its subsidiaries, operates an online content recommendation platform worldwide. It offers Outbrain Engage, a product suite for media partners that provides personalized feeds and data-driven recommendations, as well as a solution to maximize user engagement. The company’s Outbrain Engage solution also includes a web-based dashboard to manage and control various aspects of the platform, including content, formats, sources, frequency, and categories of ads delivered on their properties, as well as monetizes the content through customized data-driven advertising.

Outbrain Fundamentals Summary

How do Outbrain's earnings and revenue compare to its market cap?
OB fundamental statistics
Market Cap	US$354.46m
Earnings (TTM)	US$4.99m
Revenue (TTM)	US$1.04b

71.0x

P/E Ratio

0.3x

P/S Ratio

Is OB overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
OB income statement (TTM)
Revenue	US$1.04b
Cost of Revenue	US$801.10m
Gross Profit	US$240.72m
Other Expenses	US$235.73m
Earnings	US$4.99m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 11, 2022

Earnings per share (EPS)	0.086
Gross Margin	23.11%
Net Profit Margin	0.48%
Debt/Equity Ratio	90.2%

How did OB perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is OB undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for OB?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for OB. This is calculated by dividing OB's market cap by their current preferred multiple.
What is OB's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$354.46m

OB key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.2x
Enterprise Value/EBITDA	6.1x
PEG Ratio	2.3x

Price to Earnings Ratio vs Peers

How does OB's PE Ratio compare to its peers?

OB PE Ratio vs Peers

The above table shows the PE ratio for OB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	62.3x
TRVG trivago	86.6x	44.3%	US$593.5m
SOHU Sohu.com	15.8x	17.7%	US$638.3m
YALA Yalla Group	8.2x	21.8%	US$662.8m
CARS Cars.com	138.6x	30.9%	US$881.6m
OB Outbrain	71x	31.5%	US$354.5m

Price-To-Earnings vs Peers: OB is expensive based on its Price-To-Earnings Ratio (71x) compared to the peer average (62.3x).

Price to Earnings Ratio vs Industry

How does OB's PE Ratio compare vs other companies in the US Interactive Media and Services Industry?

Price-To-Earnings vs Industry: OB is expensive based on its Price-To-Earnings Ratio (71x) compared to the US Interactive Media and Services industry average (62.3x)

Price to Earnings Ratio vs Fair Ratio

What is OB's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

OB PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	71x
Fair PE Ratio	23.1x

Price-To-Earnings vs Fair Ratio: OB is expensive based on its Price-To-Earnings Ratio (71x) compared to the estimated Fair Price-To-Earnings Ratio (23.1x).

Share Price vs Fair Value

What is the Fair Price of OB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: OB ($6.14) is trading below our estimate of fair value ($8.77)

Significantly Below Fair Value: OB is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Outbrain forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

31.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: OB's forecast earnings growth (31.5% per year) is above the savings rate (1.9%).

Earnings vs Market: OB's earnings (31.5% per year) are forecast to grow faster than the US market (12.9% per year).

High Growth Earnings: OB's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: OB's revenue (10.4% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: OB's revenue (10.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if OB's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has Outbrain performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-67.5%

Last years earnings growth

Earnings and Revenue History

Quality Earnings: OB has a large one-off loss of $42.3M impacting its March 31 2022 financial results.

Growing Profit Margin: OB's current net profit margins (0.5%) are lower than last year (1.9%).

Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if OB's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: OB's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: OB had negative earnings growth (-67.5%) over the past year, making it difficult to compare to the Interactive Media and Services industry average (-0.03%).

Return on Equity

High ROE: OB's Return on Equity (-0.6%) is considered low.

Discover strong past performing companies

Financial Health

How is Outbrain's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: OB's short term assets ($616.4M) exceed its short term liabilities ($276.9M).

Long Term Liabilities: OB's short term assets ($616.4M) exceed its long term liabilities ($265.6M).

Debt to Equity History and Analysis

Debt Level: OB has more cash than its total debt.

Reducing Debt: Insufficient data to determine if OB's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: OB's debt is well covered by operating cash flow (20.6%).

Interest Coverage: OB's interest payments on its debt are well covered by EBIT (3.7x coverage).

Balance Sheet

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Dividend

What is Outbrain current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate OB's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate OB's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if OB's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if OB's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as OB has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure

CEO

Yaron Galai (50 yo)

16.17yrs

Tenure

US$1,583,202

Compensation

Mr. Yaron Galai is a Co-Founder of Ad4ever and serves as its Vice President of Business Development. Mr. Galai Co-founded Outbrain Inc. in June 2006 and serves as its Chairman since June 2006 and served as...

CEO Compensation Analysis

Compensation vs Market: Yaron's total compensation ($USD1.58M) is below average for companies of similar size in the US market ($USD2.70M).

Compensation vs Earnings: Yaron's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: OB's management team is considered experienced (3 years average tenure).

Board Members

Experienced Board: OB's board of directors are considered experienced (8.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.1%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/07 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31