System1 price target lowered to $5 from $9 at Benchmark

Benchmark lowered the firm’s price target on System1 to $5 from $9 and keeps a Buy rating on the shares after revenue was down 33% year-over-year in Q2. “Much of the blame can be placed squarely on System1’s SEM product,” which the firm would characterize as “a high revenue, high gross margin, but low adjusted EBITDA product,” the analyst tells investors. Based on what the firm believes to be underlying ad trends, it looks as if management has effectively de-risked the SEM product, the analyst added. Comps will remain difficult through Q2, but the firm expects a return to strong double-digit growth in the back half of next year.