ZipRecruiter, Inc. (NYSE:ZIP) Just Reported, And Analysts Assigned A US$5.80 Price Target

It's been a pretty great week for ZipRecruiter, Inc. (NYSE:ZIP) shareholders, with its shares surging 15% to US$4.34 in the week since its latest second-quarter results. It looks like the results were pretty good overall. While revenues of US$112m were in line with analyst predictions, statutory losses were much smaller than expected, with ZipRecruiter losing US$0.10 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, ZipRecruiter's seven analysts currently expect revenues in 2025 to be US$449.8m, approximately in line with the last 12 months. Per-share losses are expected to explode, reaching US$0.53 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$449.3m and losses of US$0.54 per share in 2025.

View our latest analysis for ZipRecruiter

As a result, it's unexpected to see that the consensus price target fell 19% to US$5.80, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. 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. There are some variant perceptions on ZipRecruiter, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$4.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would also point out that the forecast 0.3% annualised revenue decline to the end of 2025 is better than the historical trend, which saw revenues shrink 27% annually over the past three years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 11% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect ZipRecruiter to suffer worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that ZipRecruiter's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for ZipRecruiter going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with ZipRecruiter (including 2 which are a bit unpleasant) .

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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.