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Zoo Digital
(LSE:ZOO)
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Rating:58Neutral
Price Target:
14.50 p
▼(-17.71% Downside)
Action:Reiterated
Date:10/31/26
The score is driven primarily by a mixed financial profile: improving cash flow and EBITDA recovery support the outlook, but ongoing losses and a steep multi-year revenue decline remain major constraints and continue to erode equity. The earnings call adds support via FY'27 growth/profit progression guidance and margin improvements, while technical signals are neutral and valuation is weakened by negative earnings and no stated dividend yield.
Positive Factors
EBITDA and cash recovery
The return to positive EBITDA and cash EBITDA shows that cost control and rightsizing are improving the operating model. Although cash generation remains modest, this recovery strengthens financial resilience and provides a foundation for rebuilding profitability as revenue conditions improve.
Negative Factors
Revenue decline and ongoing losses
The multi-year revenue contraction and continuing net losses show that the operational recovery has not yet restored the company’s former earnings scale. Persistent losses can continue reducing equity and limit the resources available for investment, growth, and resilience.
Read all positive and negative factors
Positive Factors
Negative Factors
EBITDA and cash recovery
The return to positive EBITDA and cash EBITDA shows that cost control and rightsizing are improving the operating model. Although cash generation remains modest, this recovery strengthens financial resilience and provides a foundation for rebuilding profitability as revenue conditions improve.
Read all positive factors
Zoo Digital (ZOO) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£13.76M
Dividend YieldN/A
Average Volume (3M)165.67K
Price to Earnings (P/E)―
Beta (1Y)0.78
Revenue Growth-18.66%
EPS Growth56.03%
CountryUK
Employees369
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.04
Shares Outstanding98,318,230
10 Day Avg. Volume149,488
30 Day Avg. Volume165,669
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)1.03
Price to Sales (P/S)0.39
P/FCF Ratio5.64
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)>-0.01
Revenue Forecast (FY)£43.50M
Zoo Digital Business Overview & Revenue Model
Company Description
ZOO Digital Group plc, through its various subsidiaries, delivers cloud-native solutions for media localization and digital content distribution to clients primarily in the United Kingdom and the United States. The company's operations are divided...
How the Company Makes Money
Zoo Digital primarily makes money by providing media localisation services to entertainment content owners and distributors (e.g., studios and streaming platforms) that need to release content across multiple countries and languages. Its key reven...
Zoo Digital Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call presents a constructive strategic and operational turnaround: the company has cut costs, maintained industry-leading quality, integrated AI and new delivery models (Fast Track, follow-the-sun), moved back to EBITDA profitability and modest positive cash generation, and is seeing early signs of revenue recovery and winning RFPs. However, FY'26 revenue declined 15% due to subdued dubbing demand, largest-customer concentration remains high (44%), cash generation is still small ($0.4M cash EBITDA), and visibility/valuation remain constrained. On balance the positive operational progress, margin expansion and new service momentum outweigh the remaining challenges.Positive Updates
Return to Profitability and Cash Generation
EBITDA increased to $4.0M (from $1.1M prior year). Cash EBITDA moved from a loss of $2.7M in FY'25 to a positive $0.4M in FY'26, reflecting successful rightsizing and cost control and a shift to a profit- and cash-generative model.
Negative Updates
Revenue Decline and Weaker Dubbing Demand
Group revenue declined 15% to $42M, driven by normalization after strike-related backlog in FY'25 and subdued demand for dubbing due to lower original content production in the period.
Read all updates
Q4-2026 Updates
Positive
Negative
Return to Profitability and Cash Generation
EBITDA increased to $4.0M (from $1.1M prior year). Cash EBITDA moved from a loss of $2.7M in FY'25 to a positive $0.4M in FY'26, reflecting successful rightsizing and cost control and a shift to a profit- and cash-generative model.
Read all positive updates
Company Guidance
Management guided to a return to revenue growth and profit progression in FY '27 after a strong Q1; FY '26 was in line with expectations with revenue down 15% to $42.0m, EBITDA up to $4.0m (from $1.1m), cash EBITDA recovering to +$0.4m (from -$2.7m), gross margin rising to just under 42% (from 36%), and Fast Track contributing ~$2.5m (~10% of run‑rate). They highlighted customer concentration falling to 44% (from 61%), trade and other payables reduced from $18m to < $13m, $1.4m drawn of an $8m invoice financing facility, R&D capitalised of $1.7m (up from $1.5m), and headcount cut ~17%; management expects further margin improvement from AI, scalable follow‑the‑sun operations and to capture market share as streaming demand normalizes.Zoo Digital Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
63
Positive
Cash Flow
68
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 41.67M | 49.57M | 40.63M | 90.26M | 70.40M |
| Gross Profit | 11.83M | 18.02M | 5.46M | 33.93M | 22.11M |
| EBITDA | 4.09M | -333.00K | -12.61M | 14.22M | 7.82M |
| Net Income | -3.63M | -7.98M | -21.93M | 8.23M | 2.63M |
Balance Sheet | |||||
| Total Assets | 31.86M | 41.26M | 49.11M | 64.25M | 64.43M |
| Cash, Cash Equivalents and Short-Term Investments | 3.57M | 2.71M | 5.32M | 11.84M | 5.96M |
| Total Debt | 4.65M | 4.66M | 5.75M | 8.38M | 9.14M |
| Total Liabilities | 16.04M | 21.44M | 21.45M | 29.11M | 38.17M |
| Stockholders Equity | 15.81M | 19.82M | 27.65M | 35.13M | 26.26M |
Cash Flow | |||||
| Free Cash Flow | 2.88M | -772.00K | -16.86M | 8.77M | -628.00K |
| Operating Cash Flow | 3.01M | 1.49M | -11.94M | 15.70M | 5.48M |
| Investing Cash Flow | -1.63M | -2.24M | -7.14M | -8.23M | -10.06M |
| Financing Cash Flow | -251.90K | -1.84M | 12.64M | -1.60M | 7.59M |
Zoo Digital Technical Analysis
Positive
17.62
Price Trends
15.16
Negative
13.25
Positive
12.76
Positive
Market Momentum
-0.64
Negative
54.54
Neutral
55.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ZOO, the sentiment is Positive. The current price of 17.62 is above the 20-day moving average (MA) of 13.26, above the 50-day MA of 15.16, and above the 200-day MA of 12.76, indicating a neutral trend. The MACD of -0.64 indicates Negative momentum. The RSI at 54.54 is Neutral, neither overbought nor oversold. The STOCH value of 55.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:ZOO.
Zoo Digital Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | £102.04M | 15.59 | 5.35% | ― | -1.05% | -2.05% | |
67 Neutral | £40.19M | -65.82 | -0.98% | 8.98% | 19.31% | 64.00% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | £40.05M | -31.98 | 34.82% | ― | 6.07% | -851.52% | |
58 Neutral | £13.76M | -5.01 | -21.37% | ― | -18.66% | 56.03% | |
50 Neutral | £18.97M | -7.18 | -39.59% | ― | -10.28% | 9.84% | |
46 Neutral | £1.18M | -0.68 | -91.71% | ― | -42.62% | 23.44% |
* Technology Sector Average
GB:ZOO
Zoo Digital
14.00
3.38
31.76%
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GB:EXR
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-70.00%
Zoo Digital Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Zoo Digital shareholders pass all AGM resolutions, back governance and share issuance powers
Positive
Sep 30, 2026
Zoo Digital Group plc, the AIM-listed localisation and digital media services partner to global entertainment companies, reported that all resolutions at its annual general meeting on 29 September 2026 were approved by shareholders following a pol...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
ZOO Digital lifts H1 revenue outlook as streaming localisation demand rises
Positive
Sep 29, 2026
ZOO Digital said it expects first-half FY27 revenue of at least $23.0 million, representing growth on both halves of FY26 as streaming providers evolve their offerings and demand more localisation services. The board highlighted increased activity...
Financial DisclosuresShareholder Meetings
Zoo Digital Publishes 2026 Annual Report and Sets Hybrid AGM for September
Neutral
Aug 28, 2026
Zoo Digital Group plc has published its annual report and accounts for the year ended 31 March 2026, together with the notice of its upcoming annual general meeting, making these materials available electronically and in hard copy to shareholders....
Business Operations and Strategy
ZOO Digital boosts investor outreach with new quarterly newsletter
Positive
Aug 27, 2026
ZOO Digital Group has published its latest quarterly investor newsletter, directing shareholders and market followers to access the update via its online investor newsletter library. The company is also encouraging investors to subscribe to its ma...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.