Perion Network (NASDAQ:PERI) experienced a decline in trading following the company’s revised forecast attributed to Microsoft’s (NASDAQ:MSFT) Bing search engine adjustments. The advertising technology company anticipates Q1 revenue and adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to be $157 million and $20 million, respectively, lower than the Street’s revenue estimate of $175.5 million.
For FY24, Perion projects revenue and adjusted EBITDA in the range of $590 million to $610 million and $78 million to $82 million, respectively, falling below the revenue estimate of $860 million to $880 million.
The adjustment in forecast resulted from shifts in Microsoft Bing’s advertising pricing and mechanisms in the Search Distribution marketplace, diminishing Perion’s Revenue Per Thousand Impressions (RPM) and that of other Microsoft Bing partners. RPM is a common adtech metric representing estimated earnings per 1000 ad impressions.
Additionally, the company expanded its stock buyback program from $50 million to up to $75 million.
Perion is expected to announce its Q1 results on May 8.
Is Perion a Good Stock to Buy?
Analysts remain bullish about Perion stock, with a Strong Buy consensus rating based on four Buys and one Hold. Over the past year, Perion has tanked by more than 60%, and the average PERI price target of $32.80 implies an upside potential of more than 100% at current levels.
