Perion Network (PERI) AI Stock Analysis

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Perion Network

(NASDAQ:PERI)

Rating:60Neutral

Price Target:

$10.00

▲(5.60%Upside)

Perion Network's overall stock score is primarily influenced by its mixed financial performance, with strong balance sheet stability but challenges in profitability and cash flow. Technical indicators suggest mild bearishness, and its valuation is unattractive due to negative earnings. Despite these issues, the company's strategic growth initiatives and revised guidance provide a positive outlook, boosting its overall score.

Positive Factors

Acquisition Impact

The acquisition of Greenbids is expected to accelerate revenue growth potential due to its robust AI algorithm capability.

Platform Development

PERI has launched the 'Valiant One' platform, which targets CMOs with a full-stack ad platform that unifies campaign planning, execution, and reporting across all media channels.

Strategic Initiatives

PERI is shifting towards advertising with performance-based outcomes, focusing on actual purchases and in-store traffic.

Negative Factors

Earnings Estimates

Non-GAAP EPS was 5% below estimates.

Financial Performance

Gross Revenues were reported down 43% year-over-year.

Guidance

FY25 guidance for PERI was lower than expected, with a decrease in both gross revenues and adjusted EBITDA.

Perion Network (PERI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$429.65M

Dividend YieldN/A

Average Volume (3M)483.72K

Price to Earnings (P/E)41.6

Beta (1Y)1.09

Revenue Growth-43.13%

EPS Growth-107.18%

CountryUS

Employees528

SectorCommunication Services

Sector Strength84

IndustryInternet Content & Information

Share Statistics

EPS (TTM)0.11

Shares Outstanding45,037,180

10 Day Avg. Volume251,396

30 Day Avg. Volume483,720

Financial Highlights & Ratios

PEG Ratio0.12

Price to Book (P/B)1.95

Price to Sales (P/S)0.00

P/FCF Ratio9.38

Enterprise Value/Market Cap2.26

Enterprise Value/Revenue0.44

Enterprise Value/Gross Profit6.97

Enterprise Value/Ebitda5.41

Forecast

1Y Price Target

$13.50

Price Target Upside42.56% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Perion Network Business Overview & Revenue Model

Company DescriptionPerion Network Ltd. provides digital advertising solutions to brands, agencies, and publishers in North America, Europe, and internationally. It provides Wildfire, a content monetization platform; search monetization solutions, including website monetization, search mediation, and app monetization; and cross-channel digital advertising software as a service platform. The company also offers supply management platform; demand management platform for campaign planning and design; analytics platform, which provides information and performance insights on the results of campaign investment and other campaign metrics; creative platform to create advertisements; and an AI platform that uses machine learning to bring intelligence to the various phases of campaigns. In addition, it provides an actionable performance monitoring platform to support the various phases of campaign management; an online video player and integrated ad server to upload, manage, and stream video content; content monetization system, which integrates ads within the content layouts at the page level. Further, the company offers a publisher management system that provides analytics and performance optimization tools, as well as reports; search-demand management systems; monetization products that integrate and onboards demand vendors; and AI Systems. Additionally, it provides Intelligent HUB (iHUB), a platform for pulling in signals across various advertising channels and optimizing traffic at scale, and yielding engagement metrics and KPIs; and strategic optimization of relevant traits (SORT), a provisional patent technology that eliminates the need for cookies. The company was formerly known as IncrediMail Ltd. and changed its name to Perion Network Ltd. in November 2011. Perion Network Ltd. was incorporated in 1999 and is headquartered in Holon, Israel.

How the Company Makes MoneyPerion Network generates revenue through a diversified model primarily centered around digital advertising. The company earns money by offering solutions for search advertising, social media, and display/video advertising. These solutions include both managed services and self-serve platforms that allow advertisers to effectively reach target audiences. Key revenue streams include partnerships with major search engines, social media platforms, and other digital properties, where Perion facilitates ad placements and receives a share of the advertising spend or performance-based fees. Additionally, the company leverages its proprietary technologies to enhance advertising effectiveness, thereby increasing its appeal to both advertisers and publishers. Strategic acquisitions and alliances also play a crucial role in expanding Perion's market reach and capabilities, contributing to its revenue growth.

Perion Network Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue across different business units, highlighting which segments drive growth and profitability, and where strategic focus might be needed.

Chart InsightsPerion Network's Display Advertising revenue shows a recovery trend after a dip in early 2024, while Search Advertising has seen a sharp decline since mid-2024. The earnings call highlights strategic moves, such as the acquisition of Greenbids, expected to expand market opportunities and enhance profitability. Despite a decline in web revenue, the company's increased guidance and strong growth in digital out-of-home and CTV channels indicate a positive outlook. Investors should note the balanced sentiment, with promising growth tempered by financial challenges like a GAAP net loss and negative cash flow.

Data provided by:

Main Street Data

Perion Network Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q1-2025)

% Change Since: -1.04%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

Perion Network's earnings call highlighted strong growth in key segments like Digital Out-of-Home and CTV, alongside a strategic acquisition of Greenbids, leading to increased guidance. However, challenges include a decline in web revenue and a GAAP net loss. The sentiment is balanced with promising growth, yet notable financial challenges.

Q1-2025 Updates

Positive Updates

Strong Growth in Digital Out-of-Home and CTV

Digital out-of-home grew by 80% and CTV by 31% year-over-year, outperforming market growth. These channels now represent 31% of total revenue.

Acquisition of Greenbids

Perion announced the acquisition of Greenbids, a cutting-edge AI company that enhances their technology. This acquisition is expected to significantly increase the total addressable market and improve profitability.

Increased Full-Year Guidance

The company raised its full-year 2025 guidance, increasing revenue projection from a range of $400-$420 million to $430-$450 million, and adjusted EBITDA from $40-$42 million to $44-$46 million.

Strong Cash Position and Share Repurchase

Perion has a strong cash position with $358.5 million, and a share repurchase program expanded to $125 million, showing confidence in long-term value.

Negative Updates

Decline in Web Revenue

Web revenue declined by 28% year-over-year, now representing 46% of total revenue compared to 37% last year. This decline is expected to stabilize starting next quarter.

GAAP Net Loss

Perion reported a GAAP net loss of $8.3 million or $0.19 per diluted share, compared to net income of $11.8 million in the first quarter of 2024.

Negative Adjusted Free Cash Flow

Adjusted free cash flow was negative $7.4 million, impacted by $8 million of collections shifting from March to April.

Company Guidance

During the Perion Network Q1 2025 earnings call, the company provided updated guidance reflecting a positive outlook bolstered by strategic moves and strong performance. Revenue for the first quarter was reported at $89.3 million, exceeding initial expectations, with adjusted EBITDA at $1.8 million. Perion announced the acquisition of Greenbids, an AI-based company, which is expected to significantly enhance their technology and expand their total addressable market into lower funnel performance opportunities. This acquisition, along with organic growth, has led Perion to revise their full-year 2025 guidance upwards. The company now anticipates revenue to be in the range of $430 million to $450 million, up from the previous guidance of $400 million to $420 million, and adjusted EBITDA to be between $44 million and $46 million, representing a 10% increase at the midpoint. The call highlighted strong growth in digital out-of-home and CTV channels, which grew by 80% and 31% year-over-year respectively, contributing significantly to the company's revenue mix and future growth trajectory.

Perion Network Financial Statement Overview

Summary

Perion Network shows a mixed financial performance. Despite a strong balance sheet with a healthy equity ratio and low debt, the income statement reveals declining revenues and negative margins. Cash flow volatility further underscores potential operational pressures.

Income Statement

Neutral

Perion Network's income statement shows mixed performance. The TTM data reveals a decline in revenue compared to the previous year, leading to negative EBIT and net income margins. Despite past growth, recent profitability challenges indicate potential operational inefficiencies or industry headwinds.

Balance Sheet

Positive

The balance sheet remains strong, with a healthy equity ratio and low debt-to-equity ratio, indicating financial stability. However, the decline in stockholders' equity over time suggests some capital erosion, potentially due to recent losses.

Cash Flow

Neutral

Cash flow analysis shows volatility, with the TTM period reflecting negative free cash flow and operating cash flow. The ratio of free cash flow to net income has weakened, signaling cash generation challenges. Historical strong cash flow performance provides some buffer.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
429.81M	498.29M	743.15M	640.26M	478.50M	328.06M
	Gross Profit
139.28M	165.45M	272.38M	237.25M	165.28M	107.96M
	EBIT
-16.13M	-3.04M	116.74M	109.16M	45.90M	12.25M
	EBITDA
536.00K	21.83M	152.00M	127.50M	55.80M	22.18M
	Net Income Common Stockholders
-7.50M	12.61M	117.41M	99.22M	38.71M	10.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
358.48M	373.33M	472.68M	429.63M	321.65M	60.36M
	Total Assets
878.27M	916.45M	1.08B	870.22M	713.23M	358.68M
	Total Debt
21.60M	22.30M	7.65M	11.48M	13.39M	30.55M
	Net Debt
-129.12M	-133.93M	-179.96M	-164.75M	-91.06M	-17.11M
	Total Liabilities
162.67M	196.69M	359.12M	287.08M	246.27M	174.56M
	Stockholders Equity
715.60M	719.76M	718.15M	583.13M	466.96M	184.12M
Cash Flow		Free Cash Flow
-15.02M	67.00K	154.65M	121.07M	70.57M	21.54M
	Operating Cash Flow
-6.90M	6.94M	155.46M	122.12M	71.11M	22.05M
	Investing Cash Flow
90.36M	62.60M	-133.35M	-46.82M	-243.47M	-8.81M
	Financing Cash Flow
-107.24M	-100.91M	-10.82M	-3.26M	229.05M	-4.05M

Perion Network Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price9.47

Price Trends

50DMA

9.72

Negative

100DMA

9.15

Positive

200DMA

8.78

Positive

Market Momentum

MACD

-0.12

Positive

RSI

39.37

Neutral

STOCH

10.26

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PERI, the sentiment is Neutral. The current price of 9.47 is below the 20-day moving average (MA) of 10.26, below the 50-day MA of 9.72, and above the 200-day MA of 8.78, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 39.37 is Neutral, neither overbought nor oversold. The STOCH value of 10.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PERI.

Perion Network Risk Analysis

Perion Network disclosed 67 risk factors in its most recent earnings report. Perion Network reported the most risks in the "Tech & Innovation" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Perion Network Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TBLA	74 Outperform	$1.19B	95.80	1.35%	―	16.62%	―
Sector *	61 Neutral	$14.55B	5.92	-3.82%	8.36%	2.79%	-33.24%
PERI	60 Neutral	$429.65M	41.65	-1.03%	―	-43.13%	-107.18%
MAX	60 Neutral	$705.73M	36.14	-115.07%	―	148.62%	―
TRVG	59 Neutral	$273.76M	―	-11.66%	―	0.77%	87.59%
TEAD	53 Neutral	$238.58M	―	-14.61%	―	4.15%	-394.93%
ZH	44 Neutral	$325.24M	―	-0.39%	―	-19.68%	99.02%

* Communication Services Sector Average

Performance Comparison

PERI

Perion Network

9.47

0.65

7.37%

TRVG

trivago

3.88

1.86

92.08%

MAX

MediaAlpha

10.63

-5.58

-34.42%

TBLA

Taboola.com

3.52

0.14

4.14%

Zhihu

3.58

0.73

25.61%

TEAD

Teads Holding

2.43

-2.25

-48.08%

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.