Ziff Davis, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a mediocre week for Ziff Davis, Inc. (NASDAQ:ZD) shareholders, with the stock dropping 17% to US$41.31 in the week since its latest annual results. It looks like a pretty bad result, all things considered. Although revenues of US$1.4b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 25% to hit US$1.42 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Ziff Davis

Taking into account the latest results, the current consensus from Ziff Davis' six analysts is for revenues of US$1.47b in 2025. This would reflect an okay 4.6% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 140% to US$3.53. In the lead-up to this report, the analysts had been modelling revenues of US$1.49b and earnings per share (EPS) of US$3.94 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 15% to US$62.29, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Ziff Davis at US$80.00 per share, while the most bearish prices it at US$48.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ziff Davis shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ziff Davis' past performance and to peers in the same industry. The analysts are definitely expecting Ziff Davis' growth to accelerate, with the forecast 4.6% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 10% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Ziff Davis is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Ziff Davis' future valuation.

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

However, before you get too enthused, we've discovered 1 warning sign for Ziff Davis that you should be aware of.

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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.