Results: Ziff Davis, Inc. Delivered A Surprise Loss And Now Analysts Have New Forecasts

Ziff Davis, Inc. (NASDAQ:ZD) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues came in at US$364m, in line with estimates, while Ziff Davis reported a statutory loss of US$0.09 per share, well short of prior analyst forecasts for a profit. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

After the latest results, the five analysts covering Ziff Davis are now predicting revenues of US$1.50b in 2026. If met, this would reflect a credible 3.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 32% to US$3.71. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.54b and earnings per share (EPS) of US$4.03 in 2026. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Check out our latest analysis for Ziff Davis

The analysts made no major changes to their price target of US$43.14, suggesting the downgrades are not expected to have a long-term impact on Ziff Davis' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Ziff Davis at US$60.00 per share, while the most bearish prices it at US$34.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Ziff Davis'historical trends, as the 2.6% annualised revenue growth to the end of 2026 is roughly in line with the 2.9% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So it's pretty clear that Ziff Davis is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ziff Davis. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ziff Davis analysts - going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether Ziff Davis' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.