Zoo Digital (ZOO) AI Stock Analysis

• Market Cap: £9.09M
• Dividend Yield: N/A
• Average Volume (3M): 282.77K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.14
• Revenue Growth: -7.72%
• EPS Growth: 54.13%
• Country: UK
• Employees: 515
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.01
• Shares Outstanding: 98,318,230
• 10 Day Avg. Volume: 252,745
• 30 Day Avg. Volume: 282,773
• PEG Ratio: 0.02
• Price to Book (P/B): 0.60
• Price to Sales (P/S): 0.24
• P/FCF Ratio: -15.44
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £22.00
• Price Target Upside: 120.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: 10.50p ▲(5.00% Upside)

The score is held back primarily by weak profitability and deteriorated cash-flow metrics, despite a reasonably solid balance sheet. Technicals are mixed with a negative MACD and longer-term downtrend signals. The earnings call adds some support due to margin/EBITDA improvement and efficiency initiatives, but revenue declines and segment headwinds remain.

Positive Factors

Recurring platform revenue and studio partnerships

Zoo’s mix of project-based localization services plus subscription access to its cloud platform creates recurring revenue that reduces client churn sensitivity. Strong partnerships with studios and streamers support steady project pipelines and predictable demand over the medium term.

Quality and technology differentiation

A 99.9% quality metric and growing use of AI-driven workflows plus the Fast Track service shorten turnaround times. Superior quality and faster delivery create a durable competitive moat, increasing client stickiness and making it harder for competitors to displace existing contracts.

Operational cost rationalization improving margins

Management cut fixed costs materially and restored positive cash EBITDA, showing ability to right-size operations. Improved gross margins and leaner cost structure enhance resilience, enabling the firm to sustain profitability improvement even if top-line growth is slow.

Negative Factors

Severe free cash flow deterioration

An almost 90% decline in free cash flow and very low operating cash conversion signal structural cash-generation weakness. This limits capacity to fund platform investments, absorb cyclicality, or build liquidity, increasing reliance on external financing or cost cuts over the medium term.

Revenue decline and dubbing segment weakness

A meaningful revenue drop driven in part by a $2.7m fall in dubbing reveals structural demand or competitive issues in a key segment. Persistent weakness in dubbing undermines scale economics and revenue diversification, pressuring long-term growth unless new demand or product wins emerge.

Poor profitability and returns on capital

Negative net margins and deeply negative ROE indicate the business struggles to convert revenue into shareholder returns. Sustained losses erode equity value, restrict reinvestment capacity, and suggest ongoing operational inefficiencies that must be resolved for durable value creation.

Zoo Digital Business Overview & Revenue Model

Company Description

ZOO Digital Group plc, through its subsidiaries, provides cloud-based localisation and digital distribution services in the United Kingdom and the United States. It operates through two segments, Media Production, and Software Solutions. The company offers localisation services, including subtitling, scripting, dubbing, audio postproduction, and audio description; media services, such as content preparation, digital packaging/post-production, and metadata preparation; and asset health check services. It also provides various platforms, such as ZOOstudio, a secure platform that provides centralised system to manage localisation and media service operations; ZOOdubs, an end-to-end dubbing platform; ZOOsubs, a subtitling platform that enables talented translators to deliver perfect subtitles; ZOOscripts, a cloud-based scripting platform that provides centralized and accurate script reference for all localization workflows; and ZOOsign, a cloud-based dubbing contract management platform that manages dubbing contracts and assignment of rights. In addition, the company offers localization and media services to the media and entertainment industry. ZOO Digital Group plc was incorporated in 1999 and is headquartered in Sheffield, the United Kingdom.

How the Company Makes Money

Zoo Digital generates revenue through a combination of service fees for localization services and subscription fees for its digital platform. The company's primary revenue streams include charges for subtitling, dubbing, and other media localization services, which are typically project-based and vary depending on the complexity and volume of content. Furthermore, Zoo Digital's cloud-based solutions provide ongoing subscription-based revenue, enabling clients to access the technology tools necessary for efficient content management and distribution. Significant partnerships with major studios and streaming platforms enhance their market presence and contribute to steady revenue growth, as these collaborations often lead to recurring projects and long-term contracts.

Zoo Digital Financial Statement Overview

Summary

Mixed fundamentals: revenue has been volatile and profitability remains weak (negative net profit margin), while gross margin improved and leverage is manageable (low debt-to-equity, solid equity ratio). Cash flow is a key drag, with sharply weaker free cash flow growth and weak conversion of earnings into cash.

Income Statement

Zoo Digital has shown inconsistent revenue growth, with a recent increase of 5.96% after a significant decline in the previous year. The company struggles with profitability, evidenced by negative net profit and EBIT margins. While gross profit margin improved to 36.35%, the net profit margin remains negative at -16.10%, indicating ongoing challenges in cost management and operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is relatively low at 0.24, suggesting manageable leverage. However, the return on equity is negative at -40.26%, reflecting poor profitability and potential inefficiencies in using shareholder funds. The equity ratio stands at 48.03%, indicating a solid equity base relative to total assets.

Cash Flow

Zoo Digital's cash flow situation is concerning, with a significant decline in free cash flow growth at -89.31%. The operating cash flow to net income ratio is low at 0.08, indicating challenges in converting earnings into cash. The negative free cash flow to net income ratio further highlights cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	44.81M	49.57M	40.63M	90.26M	70.40M	39.52M
Gross Profit	11.48M	18.02M	5.46M	33.93M	22.11M	13.64M
EBITDA	148.10K	-333.00K	-12.61M	14.22M	7.82M	3.54M
Net Income	-6.45M	-7.98M	-21.93M	8.23M	2.63M	-3.16M
Balance Sheet
Total Assets	35.43M	41.26M	49.11M	64.25M	64.43M	24.85M
Cash, Cash Equivalents and Short-Term Investments	3.34M	2.71M	5.32M	11.84M	5.96M	2.95M
Total Debt	4.14M	4.66M	5.75M	8.38M	9.14M	6.79M
Total Liabilities	17.03M	21.44M	21.45M	29.11M	38.17M	22.01M
Stockholders Equity	18.40M	19.82M	27.65M	35.13M	26.26M	2.84M
Cash Flow
Free Cash Flow	397.88K	-772.00K	-16.86M	8.77M	-628.00K	3.13M
Operating Cash Flow	869.89K	1.49M	-11.94M	15.70M	5.48M	6.76M
Investing Cash Flow	-1.80M	-2.24M	-7.14M	-8.23M	-10.06M	-3.63M
Financing Cash Flow	-433.68K	-1.84M	12.64M	-1.60M	7.59M	-1.39M

Zoo Digital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 10 is below the 20-day moving average (MA) of 10.04, below the 50-day MA of 10.31, and below the 200-day MA of 11.84, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 84.18 is Negative, neither overbought nor oversold. The STOCH value of 50.34 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACSO	70 Outperform	£105.09M	13.72	5.30%	―	-3.95%	16.87%
OMG	69 Neutral	£66.00M	-64.04	-0.94%	7.26%	8.00%	-253.45%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GETB	60 Neutral	£43.09M	257.58	―	―	1.73%	-68.87%
ZOO	48 Neutral	£9.09M	-1.95	-32.23%	―	-7.72%	54.13%
BIRD	48 Neutral	£10.57M	-3.61	-32.98%	―	-9.19%	4.69%
EXR	43 Neutral	£1.84M	-0.57	-75.42%	―	-38.77%	-1.67%

Zoo Digital Corporate Events

ZOO Digital Wins New Studio Mandates and Overhauls Board After Cost Cuts

ZOO Digital Group has reported a pick-up in commercial activity, winning new end-to-end localisation and media services mandates from two major studio customers following a competitive request-for-proposal process, signalling improving conditions in the global entertainment market after a period of disruption. Alongside these operational gains, the company is reshaping its governance after implementing $7.7 million in annualised fixed cost reductions, with long-serving chair Gillian Wilmot and non-executive director Mickey Kalifa set to step down during 2026, senior independent director Nathalie Schwarz due to assume the chair, and a search under way for two new independent non-executive directors to support ZOO’s drive toward sustainable profitability and faster, technology-led content processing.

The most recent analyst rating on (GB:ZOO) stock is a Hold with a £9.00 price target. To see the full list of analyst forecasts on Zoo Digital stock, see the GB:ZOO Stock Forecast page.

Zoo Digital Group PLC Updates Registered Office Address

Zoo Digital Group PLC has announced a change in its registered office address to 7th Floor, Citygate, St. Marys Gate, Sheffield, effective from November 24, 2025. This change is part of the company’s ongoing efforts to optimize its operations and may reflect strategic positioning within the industry, although specific implications for stakeholders were not detailed.

The most recent analyst rating on (GB:ZOO) stock is a Hold with a £9.50 price target. To see the full list of analyst forecasts on Zoo Digital stock, see the GB:ZOO Stock Forecast page.

ZOO Digital Reports Interim Results with Improved Profitability Amid Revenue Decline

ZOO Digital Group PLC reported its interim results for the six months ended September 30, 2025, highlighting a decrease in revenues by 19% to $22.4 million compared to the previous year. Despite the revenue decline, the company achieved an 18% increase in adjusted EBITDA to $2.0 million and a reduction in operating loss to $1.2 million, thanks to a cost rationalization program and growth in media services. The company has fully implemented cost-saving initiatives, leading to improved gross margins and positive cash EBITDA. ZOO Digital has also integrated AI into its workflows, enhancing efficiency and quality, and launched a premium Fast Track service for rapid dubbing and subtitling. The company is optimistic about future growth, aiming to increase market share and return to revenue growth in FY27, as it continues to develop customer relationships and expand its international operations.

The most recent analyst rating on (GB:ZOO) stock is a Hold with a £11.00 price target. To see the full list of analyst forecasts on Zoo Digital stock, see the GB:ZOO Stock Forecast page.

ZOO Digital to Announce Interim Results and Host Investor Presentations

ZOO Digital Group plc announced it will release its unaudited interim results for the six months ending 30 September 2025 on 19 November 2025. The company will hold online presentations for both sell-side equity analysts and private investors on the same day, providing an opportunity for stakeholders to engage with the management team. This announcement highlights ZOO Digital’s commitment to transparency and investor engagement, potentially impacting its industry positioning by reinforcing trust and communication with its stakeholders.

The most recent analyst rating on (GB:ZOO) stock is a Hold with a £11.00 price target. To see the full list of analyst forecasts on Zoo Digital stock, see the GB:ZOO Stock Forecast page.

ZOO Digital Reschedules AI Webinar for Investors

ZOO Digital Group plc has announced a revised date for its AI webinar, now scheduled for 10 November 2025, aimed at investors and sell-side analysts. The event will cover the company’s AI strategy and findings from a recent white paper, featuring presentations from key executives. This initiative underscores ZOO Digital’s commitment to integrating AI into its operations, potentially enhancing its service offerings and maintaining its competitive edge in the fast-paced entertainment industry.

The most recent analyst rating on (GB:ZOO) stock is a Hold with a £12.50 price target. To see the full list of analyst forecasts on Zoo Digital stock, see the GB:ZOO Stock Forecast page.