Zedge (ZDGE) AI Stock Analysis

• Market Cap: $40.76M
• Dividend Yield: N/A
• Average Volume (3M): 39.80K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.03
• Revenue Growth: 1.27%
• EPS Growth: 78.96%
• Country: US
• Employees: 106
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 0.06
• Shares Outstanding: 13,107,146
• 10 Day Avg. Volume: 38,485
• 30 Day Avg. Volume: 39,801
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.33
• Enterprise Value/Revenue: 0.46
• Enterprise Value/Gross Profit: 0.49
• Enterprise Value/Ebitda: 138.54
• 1Y Price Target: $4.00
• Price Target Upside: 33.78% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 58 Neutral
• Price Target: $4.00 ▲(33.78% Upside)

Zedge's overall stock score reflects a mixed financial performance with strong gross margins but profitability challenges. Technical analysis indicates bearish momentum, while valuation is constrained by a negative P/E ratio. The positive earnings call, highlighting growth and strategic initiatives, provides a more optimistic outlook.

Positive Factors

Revenue Growth

The return to revenue growth indicates a positive trend in business performance, suggesting that strategic initiatives are beginning to pay off and may lead to sustained financial improvement.

AI and Innovation

Investments in AI and new product launches like Dataseeds.ai and AI audio generator position Zedge for future growth by tapping into emerging technology trends and diversifying revenue streams.

Strong Cash Position

A strong cash position and no debt provide financial flexibility, enabling Zedge to invest in growth opportunities and weather economic uncertainties without the burden of financial liabilities.

Negative Factors

Profitability Challenges

Negative net profit margins highlight ongoing profitability challenges, which could hinder long-term sustainability and necessitate operational improvements to achieve consistent profitability.

Decline in User Base

A decline in monthly active users may impact future revenue potential, as a shrinking user base can reduce advertising and in-app purchase opportunities, affecting long-term growth.

Restructuring Charges

Restructuring charges indicate operational adjustments that may disrupt short-term operations and reflect underlying inefficiencies that need addressing for sustainable growth.

Zedge Business Overview & Revenue Model

Company Description

Zedge, Inc. operates a digital publishing and content platform worldwide. Its platform enables consumers to personalize their mobile devices with ringtones, home screen app icons, wallpapers, widgets, and notification sounds. The company was incorporated in 2008 and is based in New York, New York.

How the Company Makes Money

Zedge generates revenue primarily through advertising and in-app purchases. The company offers a freemium model, where users can access a wide range of content for free, supported by advertisements. Additionally, Zedge provides premium features and content that users can purchase within the app. This includes exclusive wallpapers, ringtones, and other digital assets. Zedge also partners with various advertisers and brands to promote their products within its platform, further enhancing its revenue streams. The combination of ad revenue, in-app purchases, and partnerships allows Zedge to effectively monetize its user base.

Zedge Financial Statement Overview

Summary

Zedge's financial performance is mixed. Strong gross margins and low leverage are positive, but profitability issues with negative net income and declining free cash flow are concerns. The company maintains a solid equity position, but improvements in operational efficiency and profitability are needed.

Income Statement

Zedge's income statement reveals a challenging financial period. Gross Profit Margin is strong at approximately 93.9% TTM, indicating effective cost management. However, Net Profit Margin is negative due to consistent net losses, highlighting profitability issues. Revenue has shown some fluctuations, with the latest TTM period seeing a slight decline compared to the previous year. EBIT and EBITDA margins are also negative, reflecting ongoing operational inefficiencies.

Balance Sheet

The balance sheet is relatively stable, with a Debt-to-Equity Ratio of 0.005 TTM, indicating very low leverage and strong equity position. The Equity Ratio is robust at 75.7% TTM, indicating a solid financial structure. However, the decline in total assets and stockholders' equity over recent periods may pose future challenges.

Cash Flow

Cash flow analysis shows mixed performance. The Operating Cash Flow to Net Income Ratio is strong at -1.84 TTM, suggesting effective cash management despite net losses. Free Cash Flow has decreased in the TTM period compared to the prior fiscal year, affecting growth potential. However, the company maintains a positive Free Cash Flow, which is crucial for sustaining operations and potential investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	29.51M	30.09M	27.24M	26.55M	19.57M	9.47M
Gross Profit	27.69M	28.23M	25.00M	24.90M	18.38M	8.28M
EBITDA	97.00K	2.61M	-3.29M	9.84M	9.06M	1.17M
Net Income	-1.87M	-9.17M	-6.10M	9.71M	8.25M	-559.00K
Balance Sheet
Total Assets	37.83M	38.20M	46.83M	54.63M	37.48M	12.01M
Cash, Cash Equivalents and Short-Term Investments	20.43M	20.00M	18.13M	17.09M	24.91M	5.11M
Total Debt	137.00K	203.00K	2.33M	195.00K	231.00K	282.00K
Total Liabilities	9.20M	7.30M	7.97M	10.44M	4.32M	3.12M
Stockholders Equity	28.63M	30.90M	38.86M	44.19M	33.16M	8.88M
Cash Flow
Free Cash Flow	3.23M	4.66M	1.70M	10.88M	9.48M	1.36M
Operating Cash Flow	3.44M	5.85M	3.16M	11.49M	10.13M	2.12M
Investing Cash Flow	-544.00K	-1.19M	-2.42M	-18.95M	-5.48M	-759.00K
Financing Cash Flow	-2.51M	-2.64M	387.00K	-223.00K	15.10M	2.17M

Zedge Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• 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 2.99 is below the 20-day moving average (MA) of 3.07, below the 50-day MA of 3.44, and above the 200-day MA of 2.88, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 42.66 is Neutral, neither overbought nor oversold. The STOCH value of 21.61 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	58 Neutral	$40.76M	―	-6.29%	―	1.27%	78.96%
CCG	58 Neutral	$105.81M	-11.75	-17.21%	―	105.31%	95.66%
IZEA	54 Neutral	$64.29M	-5.18	-24.97%	―	12.49%	-30.99%
BODI	52 Neutral	$42.19M	-0.70	-288.76%	―	-31.96%	56.06%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Zedge Corporate Events

Zedge Announces Strategic Initiatives and Share Buyback

Zedge Inc. announced a series of strategic initiatives aimed at enhancing its market position and operational efficiency. The company reported significant growth in revenue and subscriptions, driven by its innovative AI tools and content platforms. Recent restructuring efforts are expected to save $4 million annually, while a $5 million share buyback is underway to drive shareholder value. These actions reflect Zedge’s commitment to disciplined capital allocation and innovation, positioning it for future growth in the digital content space.