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Zoo Digital
(LSE:ZOO)
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Rating:61Neutral
Price Target:
17.00 p
▼(-3.52% Downside)
Action:Reiterated
Date:08/26/26
The score reflects a turnaround-in-progress: cash flow and EBITDA have improved materially and the earnings call guidance points to growth and profit progression, but financial performance is still constrained by steep multi-year revenue decline and ongoing losses that are shrinking equity. Technically the stock shows strong upward momentum, while valuation support is limited due to negative earnings and no dividend.
Positive Factors
Margin and EBITDA recovery
The combination of higher gross margin and materially improved EBITDA indicates that cost control, mix changes, and Media Services efficiency are strengthening operating leverage. If sustained, this recovery can support reinvestment and move the business toward durable profitability despite uneven revenue.
Negative Factors
Sustained revenue decline
The multi-year revenue contraction shows that operational recovery has not yet translated into renewed demand or top-line stability. Lower dubbing volumes and normalized content production could continue to pressure scale, making future margin gains dependent on successfully restoring growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin and EBITDA recovery
The combination of higher gross margin and materially improved EBITDA indicates that cost control, mix changes, and Media Services efficiency are strengthening operating leverage. If sustained, this recovery can support reinvestment and move the business toward durable profitability despite uneven revenue.
Read all positive factors
Zoo Digital (ZOO) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£17.45M
Dividend YieldN/A
Average Volume (3M)555.92K
Price to Earnings (P/E)―
Beta (1Y)0.81
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. Volume374,791
30 Day Avg. Volume555,922
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 Target
£22.00Price Target Upside24.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
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 11, 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
12.77
Positive
11.91
Positive
11.99
Positive
Market Momentum
1.39
Positive
72.14
Negative
54.55
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 15.94, above the 50-day MA of 12.77, and above the 200-day MA of 11.99, indicating a bullish trend. The MACD of 1.39 indicates Positive momentum. The RSI at 72.14 is Negative, neither overbought nor oversold. The STOCH value of 54.55 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | £95.56M | 13.59 | 5.57% | ― | -1.34% | 20.88% | |
67 Neutral | £44.21M | -67.82 | -0.98% | 8.71% | 19.31% | 64.00% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | £17.45M | -6.43 | -21.37% | ― | -18.66% | 56.03% | |
51 Neutral | £39.03M | -31.17 | 34.82% | ― | 6.07% | -851.52% | |
46 Neutral | £1.18M | -2.08 | -110.31% | ― | -42.62% | 23.44% | |
42 Neutral | £5.76M | -1.90 | -40.32% | ― | -13.88% | -3.28% |
* Technology Sector Average
GB:ZOO
Zoo Digital
17.75
5.50
44.90%
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Zoo Digital Corporate Events
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...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
ZOO Digital Returns to Profitability as Restructuring Sets Stage for Renewed Growth
Positive
Jul 30, 2026
ZOO Digital reported audited results for the year to 31 March 2026 showing materially improved profitability despite a 14.7% fall in revenue to $42.3 million. Adjusted EBITDA climbed to $4.0 million from $1.1 million, operating losses narrowed sha...
Business Operations and StrategyFinancial Disclosures
ZOO Digital schedules final results release and investor briefings
Neutral
Jul 24, 2026
ZOO Digital Group, a tech-driven localisation and digital media services partner to major Hollywood studios and streaming platforms, helps entertainment companies adapt content for multiple territories, languages and platforms. Using proprietary t...
Business Operations and Strategy
ZOO Digital Boosts Investor Outreach With New Quarterly Newsletter
Positive
Jun 9, 2026
ZOO Digital Group, a tech-enabled localisation and digital media services provider to major Hollywood studios and global streaming platforms, specialises in dubbing, subtitling, captioning, metadata and artwork localisation, as well as media proce...
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.