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Zedge Inc (ZDGE)
:ZDGE
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Zedge
(NYSE MKT:ZDGE)
Rating:58Neutral
Price Target:
$4.00
▲(31.58% Upside)
Positive Factors
Earnings
ZDGE reported better-than-expected results with revenue up 1% year-over-year, driven by strength in advertising and subscriptions.
New Revenue Streams
The launch of DataSeed.AI allows the company to monetize its vast library of over 30 million images, creating a new revenue stream.
Negative Factors
Market Performance
Underperformance was a result of a material pullback in TikTok’s U.S. ad spend, declining monthly active users (MAUs), and GuruShots continuing to underperform.
User Metrics
Declining monthly active users (MAUs) negatively impacted the company's performance.
Zedge (ZDGE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$41.44M
Dividend YieldN/A
Average Volume (3M)41.01K
Price to Earnings (P/E)―
Beta (1Y)1.12
Revenue Growth1.27%
EPS Growth78.96%
CountryUS
Employees106
SectorCommunication Services
Sector Strength96
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.06
Shares Outstanding13,107,146
10 Day Avg. Volume38,131
30 Day Avg. Volume41,008
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.32
Enterprise Value/Revenue0.46
Enterprise Value/Gross Profit0.49
Enterprise Value/Ebitda138.54
Forecast
1Y Price Target
$5.00Price Target Upside64.47% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Zedge Business Overview & Revenue Model
Company DescriptionZedge, 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 MoneyZedge 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 Earnings Call Summary
Earnings Call Date:Jun 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment overall, with a return to revenue growth, improved profitability, and strategic initiatives in AI and content marketplaces. While there were challenges such as the decline in GuruShots revenue and restructuring charges, the company's focus on high-value users and strategic innovations indicated a strong future outlook.Q3-2025 Updates
Positive Updates
Return to Revenue Growth
Zedge, Inc. returned to revenue growth in Q3 with total revenue up 1.3% to $7.8 million. Subscription revenue grew by 13.4% year over year, and deferred revenue reached $5 million, up 83% year over year.
Improved Profitability
The company achieved profitability on a GAAP basis, with adjusted EBITDA increasing by 46% year over year to $1.2 million. Free cash flow was $800,000, even after significant restructuring payments.
Zedge Plus Subscriber Growth
The Zedge Plus subscriber base grew to nearly 900,000, a 37% year-over-year increase. Average revenue per monthly active user increased by 33% year over year.
Strong Cash Position
The quarter ended with $20.4 million in cash and no debt, despite repurchasing 219,000 shares under a $5 million buyback authorization.
Launch of Dataseeds.ai
Zedge launched Dataseeds.ai, a B2B content marketplace, and signed an agreement with a leading global AI technology company, opening a new revenue source.
AI Audio Generator
Introduction of an AI audio generator as part of the Paint GenAI creation suite, allowing users to generate custom ringtones and notification sounds.
Negative Updates
Decline in GuruShots Revenue
GuruShots revenue declined by 45% year over year due to reduced user acquisition spending as part of cost-saving measures.
Monthly Active Users Decline
Overall monthly active users (MAU) declined, attributed to a strategic shift away from lower lifetime value users.
Restructuring Charges
The company incurred $600,000 in restructuring charges related to global restructuring activities.
Company Guidance
In Zedge, Inc.'s third-quarter fiscal 2025 earnings call, the company reported a 1.3% increase in total revenue to $7.8 million, marking a return to growth despite challenges in the ad market. Key highlights included a 13% year-over-year growth in Zedge Plus subscription revenue, with deferred subscription revenue reaching $5 million, up 83% from the previous year. The company also achieved a 46% increase in adjusted EBITDA, totaling $1.2 million. Zedge Plus subscriber base grew to nearly 900,000, a 37% increase year over year. Free cash flow was $800,000, including $1 million in restructuring and retention payments. The company ended the quarter with $20.4 million in cash and no debt, even after repurchasing 219,000 shares. Additionally, Zedge Premium revenue more than doubled, driven by expanded offerings and increased demand for AI-generated content. The company is focused on attracting higher lifetime value users, evidenced by a 33% increase in average revenue per monthly active user. Looking ahead, Zedge is investing in AI innovations and expanding its B2B offerings, including the launch of Dataseeds.ai, to drive future growth and enhance shareholder value.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.55
Neutral
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.65
Positive
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.60
Neutral
| 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
Negative
3.04
Price Trends
3.74
Negative
3.17
Negative
2.85
Positive
Market Momentum
-0.19
Negative
38.92
Neutral
28.86
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 3.04 is below the 20-day moving average (MA) of 3.16, below the 50-day MA of 3.74, and above the 200-day MA of 2.85, indicating a neutral trend. The MACD of -0.19 indicates Negative momentum. The RSI at 38.92 is Neutral, neither overbought nor oversold. The STOCH value of 28.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZDGE.
Zedge Risk Analysis
Zedge disclosed 68 risk factors in its most recent earnings report. Zedge reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Zedge Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $92.08M | ― | -16.65% | ― | 105.31% | 95.66% | |
60 Neutral | $46.29B | 4.07 | -13.11% | 4.12% | 1.85% | -42.71% | |
58 Neutral | $41.44M | ― | -6.29% | ― | 1.27% | 78.96% | |
54 Neutral | $60.72M | ― | -22.39% | ― | 12.49% | -30.99% | |
| ― | $24.23M | ― | -93.56% | ― | ― | ― | |
52 Neutral | $40.71M | ― | -133.94% | ― | -31.96% | 56.06% | |
| ― | $91.60M | ― | -316.64% | ― | ― | ― |
* Communication Services Sector Average
Performance Comparison
ZDGE
Zedge
3.04
0.03
1.00%
IZEA
IZEA Worldwide
3.57
1.43
66.82%
SEGG
SEGG Media
6.10
-1.62
-20.98%
CCG
Cheche Group
1.08
0.48
80.00%
BODI
Beachbody Company
5.77
-0.41
-6.63%
ASST
Asset Entities, Inc. Class B
4.54
2.03
80.88%
Zedge Corporate Events
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Zedge Announces Strategic Initiatives and Share Buyback
Positive
Apr 23, 2025
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.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.