Ziff Davis Reports Strong Earnings Amid Market Challenges
Ziff Davis (ZD) exceeded expectations with quarterly earnings of $1.64 per share, surpassing the Zacks Consensus Estimate of $1.48 per share. This marks an increase from earnings of $1.50 per share from the same quarter last year. All figures have been adjusted for non-recurring items.
This quarterly result signifies an earnings surprise of 10.81%. However, a quarter ago, when analysts anticipated earnings of $1.27 per share, the company fell short with actual earnings of $1.18, resulting in a surprise of -7.09%.
Notably, over the past four quarters, Ziff Davis has exceeded consensus EPS estimates three times.
Quarterly Revenue Exceeds Expectations
For the quarter ending September 2024, Ziff Davis reported revenues of $353.58 million, beating the Zacks Consensus Estimate by 1.70%. This reflects a year-over-year revenue growth from $340.99 million. Over the prior four quarters, the company has only surpassed revenue estimates once.
The immediate direction of the stock price following this earnings report will largely hinge on insights shared by management during the earnings call.
Interestingly, Ziff Davis shares have dropped approximately 25.6% since the start of the year, in contrast to the S&P 500, which has risen by 24.3%.
Future Outlook for Ziff Davis
Despite its underperformance this year, investors are left wondering about the stock’s future trajectory. While there is no straightforward answer, examining Ziff Davis’s earnings outlook may provide clarity.
Earnings expectations not only account for current consensus estimates for upcoming quarters but also their recent revisions. Research indicates a strong link between short-term stock performance and changes in earnings estimates. Investors can monitor these revisions or depend on tools like the Zacks Rank, known for its effectiveness in tracking such movements.
As of now, the estimate revision trend for Ziff Davis appears mixed. Although the company’s recent report could shift these estimates, the current status assigns a Zacks Rank of #3 (Hold) to the stock, suggesting it will likely perform in line with the market. Investors can find a full list of today’s Zacks #1 Rank (Strong Buy) stocks online.
In the immediate future, it will be revealing to see how expectations for upcoming quarters and the current fiscal year might adjust. Currently, the consensus EPS estimate is $2.78 on projected revenues of $437.02 million for the next quarter and $6.67 on revenues of $1.42 billion for the entire fiscal year.
Additionally, it is important to consider that the overall industry outlook can significantly influence stock performance. Presently, the Zacks Industry Rank places Internet – Software in the top 25% of over 250 industries. Historical data suggests that the top half of Zacks-ranked industries outperform the bottom half by more than two to one.
Upcoming Reports from Peers
Docebo Inc. (DCBO), another player in the same sector, is set to release its quarterly results for the period ending September 2024 on November 8.
Analysts anticipate Docebo will report earnings of $0.25 per share, reflecting a year-over-year increase of 66.7%. The revenue forecast stands at $54.21 million, marking a 16.6% increase from the previous year.
Expert Stock Pick
Zacks’ research director Sheraz Mian has identified one standout stock from a pool of thousands anticipated to double in value. This company, focusing on millennial and Gen Z consumers, recorded nearly $1 billion in revenue last quarter. A recent stock pullback is seen as an opportunity for potential investors. Past winners from Zacks have achieved notable gains, with stocks like Nano-X Imaging rising 129.6% in under nine months.
For the latest recommendations from Zacks Investment Research, you can download the report on 5 Stocks Set to Double free of charge.
Ziff Davis, Inc. (ZD): Free Stock Analysis Report
Docebo Inc. (DCBO): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
