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Zedge Inc (ZDGE)
:ZDGE
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Zedge
(NYSE MKT:ZDGE)
Rating:68Neutral
Price Target:
$4.00
▲(0.25%Upside)
Positive Factors
Balance Sheet Strength
The company had $20.2M in cash and no debt, allowing it to fund organic growth without the need to raise additional capital.
Financial Performance
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
Earnings Performance
ZDGE reported F1Q25 results with revenue up 2% y/y while adjusted EBITDA was down 81% y/y, both missing estimates.
Operational Challenges
Underperformance came from GuruShots, declining MAUs, and 1x issues.
User Engagement
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.
Zedge (ZDGE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$53.30M
Dividend YieldN/A
Average Volume (3M)253.97K
Price to Earnings (P/E)―
Beta (1Y)1.24
Revenue Growth1.27%
EPS Growth78.96%
CountryUS
Employees106
SectorCommunication Services
Sector Strength84
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.06
Shares Outstanding13,107,146
10 Day Avg. Volume706,239
30 Day Avg. Volume253,966
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)1.93
Price to Sales (P/S)0.00
P/FCF Ratio16.66
Enterprise Value/Market Cap0.60
Enterprise Value/Revenue0.27
Enterprise Value/Gross Profit1.15
Enterprise Value/Ebitda7.58
Forecast
1Y Price Target
$5.00Price Target Upside25.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Zedge Business Overview & Revenue Model
Company DescriptionZedge (ZDGE) is a digital content distribution platform that specializes in providing consumers with mobile personalization tools. The company operates primarily in the mobile app sector, offering users a diverse catalog of wallpapers, ringtones, and various other digital content to customize their mobile devices. Zedge's platform is accessible both through its mobile application and website, catering to a broad audience seeking to personalize their mobile experience.
How the Company Makes MoneyZedge makes money through a combination of advertising, subscription services, and in-app purchases. The company generates revenue by displaying ads to its users within the app and on its website, leveraging its large user base to attract advertisers. Additionally, Zedge offers premium content and features through a subscription model, providing users with an ad-free experience and access to exclusive content. In-app purchases also contribute to the company's revenue, as users can buy credits to unlock premium content or other personalization features. Zedge's partnerships with content creators and brands further enhance its offerings and revenue potential.
Zedge Earnings Call Summary
Earnings Call Date:Jun 12, 2025
(Q3-2025)
| % Change Since: 42.50%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment overall, with the company returning to revenue growth and achieving significant improvements in adjusted EBITDA and subscriber growth. Despite challenges such as the decline in GuruShots revenue and restructuring costs, the strategic focus on high-value users, and new AI initiatives show promising potential for future growth.Q3-2025 Updates
Positive Updates
Return to Revenue Growth
Q3 marked a return to revenue growth for Zedge, Inc., with total revenue up 1.3% year-over-year to $7.8 million.
Significant Increase in Adjusted EBITDA
Adjusted EBITDA increased by 46% year-over-year to $1.2 million.
Zedge Plus Subscriber Growth
Zedge Plus subscriber base grew to an all-time high of nearly 900,000, a 37% year-over-year increase.
Deferred Revenue Growth
Deferred revenue reached $5 million, up 83% year-over-year and 13% sequentially.
Zedge Premium Revenue Surge
Zedge Premium revenue more than doubled, driven by expanding the offering to web users and increased usage of new features.
Strong Cash Position
The company ended the quarter with $20.4 million in cash and no debt, even after repurchasing 219,000 shares.
New AI Initiatives
Launch of Dataseeds.ai, a B2B content marketplace, and the upcoming rollout of an AI audio generator as part of the Paint suite.
Negative Updates
GuruShots Revenue Decline
GuruShots' revenue declined 45% year-over-year due to reduced user acquisition spending.
Monthly Active Users Decline
There was a year-over-year decline in monthly active users, attributed to a shift away from lower lifetime value users.
Impact of TikTok's Absence
Revenue growth was restrained due to TikTok's absence from the U.S. market until mid-February.
Restructuring Charges
Restructuring charges of $600,000 were recorded, related to global restructuring and cost reduction efforts.
Company Guidance
During Zedge, Inc.'s third-quarter fiscal 2025 earnings call, the company reported a return to revenue growth, with total revenue increasing by 1.3% to $7.8 million. Key metrics highlighted included a 13.4% increase in subscription revenue and a 37% rise in the subscriber base year-over-year. Zedge Plus subscription revenue grew by 13%, while deferred revenue climbed to $5 million, an 83% increase year-over-year. The company also noted a 46% increase in adjusted EBITDA and generated $800,000 in free cash flow, despite $1 million in payments related to restructuring and retention bonuses. Zedge ended the quarter with $20.4 million in cash and no debt, after repurchasing 219,000 shares. Average revenue per monthly active user increased by 33%, despite a decline in monthly active users, as the company shifted focus towards higher lifetime value users in well-developed markets. Looking ahead, Zedge plans to enhance its platform with AI innovations, expand its creator community, and launch new features, including an AI audio generator and Dataseeds.ai, a B2B content marketplace.Zedge Financial Statement Overview
Summary
Zedge shows strength in its balance sheet with no debt and positive cash flows. However, the decline in revenue and persistent net losses highlight challenges in profitability. The focus on reversing revenue declines and improving margins is critical for enhancing financial health.Income Statement
Zedge's TTM revenue shows a contraction with a significant decline from prior periods. Gross profit margin remains strong at 91.8%, indicating cost efficiency. However, negative EBIT and net profit margins highlight ongoing profitability challenges, with net income deeply in the red.45
Neutral
Balance Sheet
The company's balance sheet is robust with no debt, resulting in a debt-to-equity ratio of 0. The equity ratio stands at a healthy 76.0%, indicating strong capitalization. However, the decline in stockholders' equity over the recent periods is a concern.75
Positive
Cash Flow
Zedge maintains positive operating cash flow, and the free cash flow to net income ratio is strong due to improvements in free cash flow. However, the free cash flow growth rate is negative, indicating a decrease compared to previous periods. Nonetheless, the ability to sustain operations without external financing is a positive.65
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 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 | EBIT |
| -2.58M | -11.80M | -6.91M | 4.20M | 7.80M | -251.00K | EBITDA |
| 97.00K | 2.61M | 3.14M | 9.84M | 9.06M | 1.17M | Net Income Common Stockholders |
| -1.87M | -9.17M | -6.10M | 9.71M | 8.25M | -559.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 20.43M | 20.00M | 18.13M | 17.09M | 24.91M | 5.11M | Total Assets |
| 37.83M | 38.20M | 46.83M | 54.63M | 37.48M | 12.01M | Total Debt |
| 0.00 | 203.00K | 1.99M | 195.00K | 231.00K | 282.00K | Net Debt |
| -20.43M | -19.80M | -16.14M | -16.89M | -24.68M | -4.83M | 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
Positive
3.99
Price Trends
2.47
Positive
2.46
Positive
2.70
Positive
Market Momentum
0.37
Negative
88.42
Negative
87.64
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZDGE, the sentiment is Positive. The current price of 3.99 is above the 20-day moving average (MA) of 2.80, above the 50-day MA of 2.47, and above the 200-day MA of 2.70, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 88.42 is Negative, neither overbought nor oversold. The STOCH value of 87.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $53.30M | ― | -6.29% | ― | 1.27% | 78.96% | |
61 Neutral | $14.55B | 5.92 | -3.82% | 8.36% | 2.79% | -33.24% | |
56 Neutral | $35.00M | ― | -48.12% | ― | 345.36% | -650.95% | |
52 Neutral | $44.68M | ― | -28.40% | ― | 7.16% | -90.90% | |
51 Neutral | $399.78M | 25.25 | -1.00% | ― | 0.82% | -102.72% | |
45 Neutral | $24.79M | ― | -29.17% | ― | -3.17% | 13.15% |
* Communication Services Sector Average
Performance Comparison
ZDGE
Zedge
3.99
1.10
38.06%
SCOR
comScore
4.66
-10.62
-69.50%
IZEA
IZEA Worldwide
2.70
0.62
29.81%
SEAT
Vivid Seats
1.91
-3.46
-64.43%
MNY
MoneyHero Limited
0.74
-1.35
-64.59%
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.