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On Tuesday, Benchmark analysts maintained a Buy rating on shares of Taboola (NASDAQ:TBLA), with a steady price target of $5.00. Currently trading at $3.65, the stock appears undervalued according to InvestingPro analysis, with analyst targets ranging from $5.00 to $6.00. The affirmation comes as the company prepares to release its fourth-quarter results on Wednesday, February 26, before the market opens.
Taboola, known for its content discovery and native advertising platform, has been observed by Benchmark for its financial performance and strategic initiatives. The company has demonstrated strong momentum with 21.84% revenue growth in the last twelve months, while maintaining a healthy balance sheet with more cash than debt. InvestingPro data reveals 8 additional key insights about Taboola’s financial health, available to subscribers. The company’s previous quarter’s results and guidance for the fourth quarter indicated a level of stability in both revenue and earnings, which has been a positive sign for analysts.
The firm anticipates several growth drivers for the company in the coming year, including partnerships with premium publishers like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Yahoo!. Additionally, the expansion of inventory through products such as Taboola News and Buy Taboola, as well as the scaling of GenAI-driven advertiser and publisher tools, are expected to contribute to Taboola’s top-line growth. Management’s confidence is evident through aggressive share buybacks, while analysts project the company will return to profitability this year.
Investors are looking forward to more detailed updates on these growth catalysts and strategies for the year ahead during Taboola’s Investor Day, scheduled for March 26 in New York City. The event is set to provide clarity on the company’s plans, particularly following a year of integrating and scaling Yahoo! supply and advertiser relations.
Benchmark’s confidence in Taboola is also tied to the company’s go-to-market strategies, which are expected to be more clearly defined in 2025. The focus on both ends of the opportunity spectrum – supply and advertising – is a critical aspect of Taboola’s approach to growth in the coming year.
As the market anticipates Taboola’s forthcoming quarterly results, Benchmark’s reiteration of its Buy rating and price target suggests a positive outlook for the company’s financial performance and strategic direction.
In other recent news, Taboola has secured an exclusive three-year partnership with LINE, a global platform with nearly 200 million monthly active users. This agreement designates Taboola as LINE’s first third-party partner for offering a news service in regions where it was previously unavailable. Additionally, Taboola has renewed its partnership with Reach PLC, marking the continuation of their collaboration into its thirteenth year. This renewal allows Reach PLC, the largest news publisher in the UK and Ireland, to continue using Taboola’s suite of products, including new monetization options through Taboola’s Header Bidding product.
Furthermore, JMP Securities has adjusted its price target for Taboola shares to $5.00 from the previous $6.00, while maintaining a ’Market Outperform’ rating. The firm anticipates Taboola’s upcoming fourth-quarter 2024 results to align with their predictions, although they foresee 2025 guidance falling below estimates due to SEO challenges. Meanwhile, Alpha Star Acquisition Corporation has extended its merger deadline to June 2025, following shareholder approval. This extension grants Alpha Star more time to finalize a business combination, reflecting its strategic approach to potential opportunities in the real estate and construction sectors.
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