Zedge (ZDGE) AI Stock Analysis

• Market Cap: $38.77M
• Dividend Yield: N/A
• Average Volume (3M): 43.85K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.89
• Revenue Growth: -1.29%
• EPS Growth: 86.87%
• Country: US
• Employees: 106
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 0.07
• Shares Outstanding: 12,485,331
• 10 Day Avg. Volume: 54,425
• 30 Day Avg. Volume: 43,846
• PEG Ratio: 0.31
• Price to Book (P/B): 2.13
• Price to Sales (P/S): 1.88
• P/FCF Ratio: 16.54
• Enterprise Value/Market Cap: 0.53
• Enterprise Value/Revenue: 0.69
• Enterprise Value/Gross Profit: 0.76
• Enterprise Value/Ebitda: -48.59
• 1Y Price Target: $6.00
• Price Target Upside: 146.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: $3.00 ▲(23.46% Upside)

The score is driven by solid technical strength (price above key moving averages with positive MACD) and a constructive earnings update (renewed revenue growth and strong subscription expansion). Offsetting these positives are mixed financial performance—negative net margin/ROE and declining free cash flow growth—and a less supportive valuation signal due to a negative P/E despite the high dividend yield.

Positive Factors

High gross margin & low leverage

A 90%+ gross margin on content sales indicates a highly scalable, low incremental cost model where additional users add revenue with minimal COGS. Combined with almost no debt, this provides durable financial flexibility to invest in product, weather ad cycles, and expand operating leverage over months.

Subscription growth & improved monetization

Rapid subscription growth and rising ARPMAU materially strengthen recurring revenue and reduce reliance on volatile ad CPMs. A larger, higher-ARPU subscriber base improves lifetime value, supports predictable cash flow, and creates a durable monetization engine that can sustain margin expansion as scale continues.

Enterprise DataSeeds traction

A materially larger enterprise order signals product-market fit for DataSeeds in AI data services. B2B contracts are higher-value and more durable than consumer ad revenue, offering diversification, improved revenue visibility, and a path to higher-margin, repeatable business if the pipeline converts consistently.

Negative Factors

Negative net margin & ROE

Despite strong gross margins, the company posts negative net margins and negative ROE, reflecting insufficient operating leverage or higher operating costs. Persisting net losses erode equity returns and require either sustained revenue acceleration or structural cost reduction to achieve durable profitability.

Free cash flow decline & restructuring hit

Declining free cash flow and one-time restructuring cash outflows weaken internal funding capacity. Even with decent cash reserves, recurring FCF weakness limits ability to finance growth, buybacks or dividends long-term and raises dependency on careful capital allocation to sustain operations and product investments.

Underperforming segments and platform exposure

Revenue drops at Emojipedia linked to third-party platform feature changes and AI illustrate structural platform risk. Underperforming assets like GuruShots increase volatility and require ongoing investment or restructuring, which can depress consolidated margins and distract management from core growth priorities.

Zedge Business Overview & Revenue Model

Company Description

Zedge (ZDGE) is a mobile content platform that specializes in offering a wide range of personalization tools for smartphones, including wallpapers, ringtones, and notification sounds. Operating in the mobile technology sector, Zedge allows users to customize their devices with unique content, enhancing user experience and engagement. The platform is available across various app stores, making it accessible to a global audience.

How the Company Makes Money

Zedge generates revenue primarily through in-app advertising and premium content sales. Its freemium model allows users to access a vast library of free content, while also offering paid features such as exclusive wallpapers and ringtones. The company partners with brands and advertisers to promote their products through targeted ads within the app, contributing to its advertising revenue. Additionally, Zedge may collaborate with mobile device manufacturers and other technology firms to bundle its services, further expanding its revenue opportunities.

Zedge Financial Statement Overview

Summary

Mixed fundamentals: very strong gross margin (90.2%) and minimal leverage (debt-to-equity 0.0089), but profitability remains weak (TTM net margin -4.2%, ROE -4.7%) and free cash flow growth declined (-9.6% TTM).

Income Statement

Zedge's income statement shows a mixed performance. The company has a high gross profit margin of 90.2% in the TTM, indicating strong cost management. However, the net profit margin is negative at -4.2%, reflecting ongoing profitability challenges. Revenue growth is positive at 1.4% in the TTM, but the company has experienced fluctuations in revenue growth over the past years, with a notable decline in the previous annual period.

Balance Sheet

The balance sheet is relatively strong with a low debt-to-equity ratio of 0.0089, indicating minimal leverage. However, the return on equity is negative at -4.7%, suggesting inefficiencies in generating returns for shareholders. The equity ratio is not explicitly calculated, but the low debt levels imply a stable financial structure.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by -9.6% in the TTM, which is concerning. However, the operating cash flow to net income ratio is 0.39, indicating some ability to convert income into cash. The free cash flow to net income ratio is above 1, suggesting that the company is generating more free cash flow than net income, which is a positive sign.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	29.40M	30.09M	27.24M	26.55M	19.57M
Gross Profit	26.41M	25.78M	21.73M	22.94M	17.11M
EBITDA	-1.57M	-8.91M	-3.29M	13.57M	9.31M
Net Income	-2.39M	-9.17M	-6.10M	9.71M	8.25M
Balance Sheet
Total Assets	35.65M	38.20M	46.83M	54.63M	37.48M
Cash, Cash Equivalents and Short-Term Investments	18.61M	20.00M	18.13M	17.09M	24.91M
Total Debt	197.00K	203.00K	2.33M	195.00K	231.00K
Total Liabilities	9.75M	7.30M	7.97M	10.44M	4.32M
Stockholders Equity	25.90M	30.90M	38.86M	44.19M	33.16M
Cash Flow
Free Cash Flow	3.34M	4.66M	1.70M	10.88M	9.48M
Operating Cash Flow	3.42M	5.85M	3.16M	11.49M	10.13M
Investing Cash Flow	-549.00K	-1.19M	-2.42M	-18.95M	-5.48M
Financing Cash Flow	-4.37M	-2.64M	387.00K	-223.00K	15.10M

Zedge Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.43
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZDGE, the sentiment is Negative. The current price of 2.43 is below the 20-day moving average (MA) of 3.44, below the 50-day MA of 3.10, and below the 200-day MA of 3.10, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 41.92 is Neutral, neither overbought nor oversold. The STOCH value of 38.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZDGE.

Zedge Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZDGE	61 Neutral	$38.77M	-33.04	-4.52%	―	-1.29%	86.87%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
IZEA	51 Neutral	$58.23M	-16.56	-6.62%	―	7.12%	78.68%
CCG	50 Neutral	$64.62M	-7.17	―	―	105.31%	95.66%
BODI	50 Neutral	$78.89M	-1.79	-102.66%	―	-37.41%	60.58%
ASST	45 Neutral	$738.98M	-0.71	-54.47%	―	―	―

Zedge Corporate Events

Zedge Shareholders Back Leadership, Board Declares Quarterly Dividend

At its Annual Meeting of Stockholders held on January 14, 2026, Zedge, Inc. shareholders elected all nominated directors to one-year terms, ratified the appointment of UHY LLP as the company’s independent registered public accounting firm for the fiscal year ending July 31, 2026, and approved an amendment to the 2016 Stock Option and Incentive Plan that increases the pool of Class B common shares available for equity awards by 150,000, signaling continued support for the existing leadership and compensation framework. Also on January 14, 2026, Zedge’s board declared a quarterly cash dividend of $0.016 per share, payable on or about February 10, 2026 to shareholders of record as of January 30, 2026, underscoring the company’s ongoing practice of returning capital to its investors.

The most recent analyst rating on (ZDGE) stock is a Buy with a $6.00 price target. To see the full list of analyst forecasts on Zedge stock, see the ZDGE Stock Forecast page.