Nexxen International (NEXN) AI Stock Analysis

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Nexxen International

(NASDAQ:NEXN)

Rating:81Outperform

Price Target:―

Nexxen International's strong performance in key growth areas such as CTV and improved EBITDA margins drive a positive outlook, despite financial challenges and valuation concerns. The company's strategic initiatives and raised guidance further bolster its stock potential.

Positive Factors

Financial Performance

NEXN overdelivered in 1Q25 with adjusted EBITDA significantly above estimates.

Product Innovation

Nexxen is beginning to roll out new AI solutions to enhance advertiser value proposition, including nexAI, a suite of generative AI and ML-powered assistants.

Valuation

Despite the recent strong stock performance, with shares up ~50% since mid-March, NEXN is still trading at undemanding valuations of ~1.5x FY25 revenue and ~4.5x adj. EBITDA, and execution against these targets should drive further multiple expansion.

Negative Factors

Market Challenges

Integration challenges and macro headwinds led to a difficult 2023 for Nexxen.

Nexxen International (NEXN) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$677.77M

Dividend YieldN/A

Average Volume (3M)408.88K

Price to Earnings (P/E)16.0

Beta (1Y)1.08

Revenue Growth10.36%

EPS GrowthN/A

CountryUS

Employees854

SectorCommunication Services

Sector Strength89

IndustryAdvertising Agencies

Share Statistics

EPS (TTM)0.16

Shares Outstanding63,819,817

10 Day Avg. Volume466,982

30 Day Avg. Volume408,882

Financial Highlights & Ratios

PEG Ratio0.03

Price to Book (P/B)0.63

Price to Sales (P/S)0.00

P/FCF Ratio2.42

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$12.00

Price Target Upside36.67% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Nexxen International Business Overview & Revenue Model

Company DescriptionNexxen International Ltd. provides end-to-end software platform that enables advertisers to reach relevant audiences and publishers. The company's demand side platform (DSP) offers full-service and self-managed marketplace access to advertisers and agencies to execute their digital marketing campaigns in real time across various ad formats. Its sell supply side platform (SSP) provides access to data and a comprehensive product suite to drive inventory management and revenue optimization. The company also offers data management platform solution, which integrates DSP and SSP solutions enabling advertisers and publishers to use data from various sources in order to optimize results of their advertising campaigns. It serves ad buyers, advertisers, brands, agencies, and digital publishers in Israel, the United States, the Asia-Pacific, Europe, the Middle East, and Africa. The company was formerly known as Tremor International Ltd and changed its name to Nexxen International Ltd. in January 2024. Nexxen International Ltd. was incorporated in 2007 and is headquartered in Tel Aviv-Yafo, Israel.

How the Company Makes MoneyNexxen International generates revenue through a multifaceted business model. The primary revenue streams include subscription fees from its cloud-based software platforms and licensing fees for its enterprise applications. Additionally, the company earns significant income from consulting services, where it provides digital transformation and cybersecurity expertise to its clients. Strategic partnerships with technology firms and ongoing client contracts also contribute to its financial success. Nexxen's focus on continuous innovation and customer-centric solutions helps maintain a steady flow of revenue and positions it competitively in the technology market.

Nexxen International Financial Statement Overview

Summary

Nexxen International faces financial challenges with declining revenues and a negative net profit margin, but maintains a strong balance sheet with low leverage. Operational inefficiencies impact profitability, and cash flow management needs improvement for sustaining operations.

Income Statement

Positive

Nexxen International's income statement reveals a mixed performance with declining revenue over the past few years. The gross profit margin remains healthy at 81.3% in 2023. However, the company is currently facing profitability challenges, evidenced by a negative net profit margin of -6.5% due to a net loss. The EBIT margin has also turned negative at -5.1%, indicating operational inefficiencies. The significant drop in revenue from 2021 to 2022 highlights growth concerns.

Balance Sheet

Positive

The balance sheet of Nexxen International shows a strong equity base with a debt-to-equity ratio of 0.25, indicating low leverage and financial stability. The equity ratio stands at 60.1%, showcasing a robust capital structure. However, there is a slight decline in stockholders' equity over the years. Despite this, the company's return on equity (ROE) has decreased to -3.95% in 2023, reflecting recent profitability issues.

Cash Flow

Positive

Nexxen's cash flow statement demonstrates resilience with a positive operating cash flow to net income ratio of -2.83, despite the net loss. The free cash flow has decreased from previous years, showing a contraction in liquidity. The free cash flow to net income ratio is a positive highlight, but the overall cash flow trends indicate a need for better cash management strategies.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
365.48M	331.99M	335.25M	341.94M	211.92M
	Gross Profit
304.46M	269.72M	274.50M	270.29M	152.11M
	EBIT
40.82M	-16.98M	44.75M	74.46M	-6.03M
	EBITDA
106.15M	69.50M	89.74M	115.20M	39.61M
	Net Income Common Stockholders
35.44M	-21.49M	22.74M	73.22M	2.14M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
187.07M	234.31M	217.50M	367.72M	97.46M
	Total Assets
840.51M	904.80M	956.16M	802.74M	535.01M
	Total Debt
37.20M	136.13M	127.88M	14.99M	21.21M
	Net Debt
-149.87M	-98.17M	-89.62M	-352.72M	-76.25M
	Total Liabilities
309.66M	361.25M	404.55M	230.36M	205.99M
	Stockholders Equity
530.85M	543.55M	551.62M	572.38M	329.01M
Cash Flow		Free Cash Flow
127.31M	41.12M	67.83M	161.74M	29.71M
	Operating Cash Flow
150.84M	60.74M	83.01M	170.09M	35.16M
	Investing Cash Flow
-21.21M	-16.96M	-232.99M	-16.49M	4.92M
	Financing Cash Flow
-174.74M	-26.55M	3.06M	116.86M	-22.37M

Nexxen International Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price8.78

Price Trends

50DMA

9.31

Positive

100DMA

9.36

Positive

200DMA

8.85

Positive

Market Momentum

MACD

0.50

Positive

RSI

51.13

Neutral

STOCH

11.93

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEXN, the sentiment is Neutral. The current price of 8.78 is below the 20-day moving average (MA) of 10.97, below the 50-day MA of 9.31, and below the 200-day MA of 8.85, indicating a neutral trend. The MACD of 0.50 indicates Positive momentum. The RSI at 51.13 is Neutral, neither overbought nor oversold. The STOCH value of 11.93 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NEXN.

Nexxen International Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEXN	81 Outperform	$677.77M	16.04	8.57%	―	10.36%	―
DLX	71 Outperform	$610.25M	10.94	9.10%	8.80%	-2.69%	61.73%
EEX	69 Neutral	$890.89M	278.26	1.62%	1.00%	4.87%	―
Sector *	60 Neutral	$14.11B	6.38	-3.55%	3.70%	2.53%	-36.14%
ADV	54 Neutral	$363.23M	―	-42.89%	―	-13.81%	-433.86%
CCO	48 Neutral	$536.45M	―	4.92%	―	-17.54%	66.05%
NCMI	47 Neutral	$462.09M	―	-4.73%	0.61%	42.01%	-100.56%

* Communication Services Sector Average

Performance Comparison

NEXN

Nexxen International

10.62

4.23

66.20%

CCO

Clear Channel Outdoor

1.08

-0.36

-25.00%

DLX

Deluxe

13.64

-7.14

-34.36%

NCMI

National Cinemedia

4.90

-0.66

-11.87%

EEX

Emerald Expositions Events

4.48

-1.39

-23.68%

ADV

Advantage Solutions

1.12

-2.42

-68.36%

Nexxen International Earnings Call Summary

Earnings Call Date:May 14, 2025

(Q1-2025)

% Change Since: -28.73%|

Next Earnings Date:Aug 14, 2025

Earnings Call Sentiment Positive

Nexxen's earnings call highlighted strong growth in CTV revenue and programmatic revenue, significant advancements in AI capabilities with nexAI, and an aggressive share repurchase strategy, signaling a positive outlook despite some challenges in non-programmatic business lines and economic uncertainties. The sentiment is cautiously optimistic, with a focus on execution and resilience in the face of potential economic challenges.

Q1-2025 Updates

Positive Updates

Record Contribution ex-TAC and Programmatic Revenue

Nexxen achieved a Q1 record contribution ex-TAC of $75 million, representing an 8% year-over-year growth. Programmatic revenue also reached a Q1 record of $71.8 million, a 10% increase compared to Q1 2024.

Strong CTV Revenue Growth

CTV revenue hit a record $26.4 million in Q1, reflecting 40% year-over-year growth, and accounted for 37% of programmatic revenue, up from 29% in Q1 2024.

Launch of nexAI

The launch of nexAI, a suite of generative AI and machine learning powered tools, promises enhanced advertising capabilities, including faster insights and smarter planning, which have already led to meaningful productivity gains for clients.

Share Repurchase Program

Nexxen completed a $50 million share repurchase program and launched a new $50 million program, reflecting confidence in the company's valuation and future prospects.

Improved Adjusted EBITDA Margin

Adjusted EBITDA reached $23.1 million, a 95% increase from Q1 2024, with an adjusted EBITDA margin of 31% as a percentage of contribution ex-TAC, up from 17% in Q1 2024.

Negative Updates

Decline in Non-Programmatic Business

There was an approximately $900,000 year-over-year decrease in contribution ex-TAC from non-programmatic business lines, and a 22% decrease in contribution ex-TAC from display.

Reduced Net Cash from Operating Activities

Net cash from operating activities decreased to $19.3 million compared to $37.7 million in Q1 2024.

Economic Uncertainty and Softness in Q2

The advertising market experienced some softness entering Q2 due to economic uncertainty and evolving U.S. policies, impacting market sentiment and advertising demand.

Company Guidance

During Nexxen's first-quarter earnings call for fiscal year 2025, the company reaffirmed its full-year guidance, projecting a contribution ex-TAC of approximately $380 million, with programmatic revenue expected to comprise around 90% of total revenue. The anticipated adjusted EBITDA for the year stands at about $125 million. In the first quarter, Nexxen achieved a record contribution ex-TAC of $75 million, marking an 8% year-over-year growth, and programmatic revenue reached $71.8 million, reflecting a 10% increase compared to Q1 2024. CTV revenue grew by 40% year-over-year to reach $26.4 million, representing 37% of programmatic revenue. Adjusted EBITDA for the quarter was $23.1 million, a significant 95% increase from the previous year, resulting in an adjusted EBITDA margin of 31%. The company experienced growth across several verticals, including education, finance, health, and automotive, while noting a $900,000 year-over-year decrease in contribution ex-TAC from non-programmatic business lines. Nexxen also reported non-IFRS diluted earnings per share of $0.16, compared to $0.02 in Q1 2024, and repurchased approximately 3.7 million ordinary shares during the quarter. Despite some market softness in Q2, Nexxen remains confident in its full-year guidance, supported by trends such as spend consolidation, industry recognition, and CTV revenue growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.