Nexxen International (NEXN) AI Stock Analysis

• Market Cap: $656.07M
• Dividend Yield: N/A
• Average Volume (3M): 353.34K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.71
• Revenue Growth: 1.63%
• EPS Growth: N/A
• Country: US
• Employees: 854
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 0.20
• Shares Outstanding: 135,451,000
• 10 Day Avg. Volume: 347,173
• 30 Day Avg. Volume: 353,338
• PEG Ratio: -0.04
• Price to Book (P/B): 0.65
• Price to Sales (P/S): 0.95
• P/FCF Ratio: 2.71
• Enterprise Value/Market Cap: 0.68
• Enterprise Value/Revenue: 1.19
• Enterprise Value/Gross Profit: 1.55
• Enterprise Value/Ebitda: 4.07
• 1Y Price Target: $11.67
• Price Target Upside: 97.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• 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

Strong CTV Growth

The substantial growth in CTV revenue indicates Nexxen's successful expansion in a high-demand sector, enhancing its competitive position and potential for sustained revenue growth.

Adjusted EBITDA Increase

The significant increase in adjusted EBITDA and margin improvement demonstrates operational efficiency and profitability, strengthening financial stability.

New Partnerships and Clients

The addition of new clients and partners expands Nexxen's market reach and revenue base, supporting long-term growth and diversification.

Negative Factors

Declining Revenue

The trend of declining revenue poses a challenge to Nexxen's growth strategy, potentially impacting its ability to invest in innovation and expansion.

Profitability Challenges

Persistent profitability issues could hinder Nexxen's ability to reinvest in its business and compete effectively, affecting long-term sustainability.

Cash Flow Management

Decreasing free cash flow highlights potential liquidity issues, which could limit Nexxen's operational flexibility and ability to fund growth initiatives.

Nexxen International Business Overview & Revenue Model

Company Description

Nexxen 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 Money

Nexxen 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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	376.35M	365.48M	331.99M	335.25M	341.94M	211.92M
Gross Profit	288.42M	304.46M	269.72M	274.50M	270.29M	152.11M
EBITDA	110.11M	106.15M	69.50M	89.74M	115.20M	39.61M
Net Income	39.36M	35.44M	-21.49M	22.74M	73.22M	2.14M
Balance Sheet
Total Assets	747.73M	840.51M	904.80M	956.16M	802.74M	535.01M
Cash, Cash Equivalents and Short-Term Investments	116.73M	187.07M	234.31M	217.50M	367.72M	97.46M
Total Debt	31.84M	37.20M	136.13M	127.88M	14.99M	21.21M
Total Liabilities	276.81M	309.66M	361.25M	404.55M	230.36M	205.99M
Stockholders Equity	470.92M	530.85M	543.55M	551.62M	572.38M	329.01M
Cash Flow
Free Cash Flow	114.52M	127.31M	41.12M	67.83M	161.74M	29.71M
Operating Cash Flow	128.13M	150.84M	60.74M	83.01M	170.09M	35.16M
Investing Cash Flow	-50.37M	-21.21M	-16.96M	-232.99M	-16.49M	4.92M
Financing Cash Flow	-132.01M	-174.74M	-26.55M	3.06M	116.86M	-22.37M

Nexxen International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.92
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEXN, the sentiment is Negative. The current price of 5.92 is below the 20-day moving average (MA) of 6.41, below the 50-day MA of 6.76, and below the 200-day MA of 9.03, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 29.14 is Positive, neither overbought nor oversold. The STOCH value of 15.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEXN.

Nexxen International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRTO	76 Outperform	$1.09B	7.08	15.37%	―	0.32%	69.78%
NEXN	75 Outperform	$656.07M	9.47	7.91%	―	1.63%	―
MGNI	68 Neutral	$2.32B	43.29	7.56%	―	6.27%	226.16%
QNST	66 Neutral	$867.16M	83.78	4.55%	―	43.12%	―
STGW	65 Neutral	$1.32B	72.49	3.80%	―	6.76%	1841.46%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
MNTN	46 Neutral	$885.27M	-19.54	―	―	31.28%	-22.05%