What Ziff Davis (ZD)'s Strongest Revenue Growth Since 2021 Means For Shareholders

• Ziff Davis recently reported a robust quarter, exceeding analyst expectations for both revenue and full-year earnings guidance, achieving its strongest revenue growth since 2021, according to CEO Vivek Shah.
• This standout performance comes after a period where the company faced flat long-term revenue growth and declining earnings, highlighting a shift in its operating momentum.
• We'll examine how Ziff Davis's recent earnings beat and full-year guidance raise could influence its longer-term investment outlook.

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Ziff Davis Investment Narrative Recap

For shareholders of Ziff Davis, conviction is tied to the company reigniting sustainable growth following an extended stretch of flat revenue and slipping earnings. While the latest earnings beat and raised guidance signal improved execution and have fueled a sharp rally, the most important short-term catalyst, continued outperformance versus expectations, still hinges on management’s ability to deliver consistent revenue momentum; meanwhile, Ziff Davis’s reliance on acquisitions remains the biggest risk and was not materially addressed by recent results.

Of the recent announcements, the company’s ongoing share buyback program stands out in light of recent gains. Ziff Davis repurchased over 1 million shares in the last quarter, reducing share count and boosting earnings per share just as its results began to recover; this may support shareholder returns in the near term, but longer-term prospects still depend on establishing more predictable organic growth.

However, investors should keep in mind that despite the improved quarter, ongoing dependence on M&A for future growth continues to expose the business to...

Read the full narrative on Ziff Davis (it's free!)

Ziff Davis is projected to achieve $1.6 billion in revenue and $235.9 million in earnings by 2028. This outlook is based on a 3.9% annual revenue growth rate and a $169.8 million increase in earnings from the current $66.1 million.

Uncover how Ziff Davis' forecasts yield a $45.29 fair value, a 15% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members’ fair value estimates for Ziff Davis range widely from US$45.29 to US$114.15, across two analyses. With a heavy dependence on acquisition-driven growth highlighted as a central risk, you may want to weigh several different viewpoints.

Explore 2 other fair value estimates on Ziff Davis - why the stock might be worth over 2x more than the current price!

Build Your Own Ziff Davis Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Ziff Davis research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Ziff Davis research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Ziff Davis' overall financial health at a glance.

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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.

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