Benchmark reiterates Buy rating on Criteo stock with $42 price target

Investing.com - Benchmark maintained its Buy rating and $42.00 price target on Criteo S.A. (NASDAQ:CRTO), currently trading at $23.45, following the company’s second-quarter earnings report. The stock, which InvestingPro data shows is trading near its 52-week low of $22.43, has analyst targets ranging from $27 to $51.

Criteo’s quarterly results and outlook were "better than feared," according to Benchmark, with the company modestly raising its 2025 revenue and adjusted EBITDA guidance. Performance Media showed relative strength with Retargeting returning to mid-single-digit growth and Commerce Audiences maintaining mid-teens growth helped by offsite gains. The company maintains strong financial health with a perfect Piotroski Score of 9, according to InvestingPro, which offers 12+ additional insights about the company’s performance.

Retail Media customer excluding traffic (CexT) growth decelerated to approximately 11% year-over-year, which Benchmark described as "disappointing." This represented nearly an 800 basis point quarter-over-quarter slowdown on a two-year stack basis, excluding Criteo’s largest client losses that will primarily impact financial results in the fourth quarter.

The firm noted Retail Media take rate was "notably weaker" compared to prior periods, declining 250 basis points quarter-over-quarter versus 180 basis points in the second quarter of 2024. Benchmark attributed this partially to growing agency mix in Criteo’s business.

On a positive note, Benchmark highlighted management’s comments about strong demand for Criteo’s auction-based display product launched in June, with approximately 16 retailers currently using it and expectations to double that number in the coming weeks. While Benchmark doesn’t expect newer products to immediately lift retail media take rates, it believes these offerings will "substantiate higher market rates for Criteo’s stack overall." Trading at a P/E ratio of 9.58 with an impressive 18% free cash flow yield, InvestingPro analysis indicates the stock is currently undervalued.

In other recent news, Criteo reported second-quarter results for 2025, with Contribution ex-TAC and Adjusted EBITDA surpassing consensus expectations by 6% and 34%, respectively. Following these results, BMO Capital raised its price target for Criteo from $49 to $51, maintaining an Outperform rating. However, Benchmark adjusted its price target for the company from $46 to $42, citing concerns over retail media, though it still retains a Buy rating. Criteo has also announced significant leadership changes aimed at accelerating growth, with Todd Parsons (NYSE:PSN) now serving as Chief Product Officer and President of Performance Media, and Sherry Smith promoted to President of Retail Media. Additionally, Wilfried Schobeiri has been appointed as Senior Vice President, Head of Product, Performance Media, to enhance the company’s performance media offerings. In a strategic move, Criteo has partnered with WPP (LON:WPP) Media to integrate commerce signals into Connected TV advertising, enhancing brand reach across premium CTV inventory. This partnership leverages Criteo’s real-time commerce signals from 17,000 e-commerce sites and WPP Media’s Open Intelligence. These developments reflect Criteo’s ongoing efforts to strengthen its market position and expand its capabilities.

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