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On Monday, Canaccord Genuity adjusted its price target for Fluent Inc. (NASDAQ:FLNT) shares, reducing it to $3.50 from the previous target of $4.00, while maintaining a Hold rating on the stock. According to InvestingPro data, Fluent’s market capitalization stands at $54.26 million, with the stock currently trading below its Fair Value. The adjustment comes in the wake of Fluent’s fourth-quarter earnings report, which revealed mixed financial results, with both revenue and profitability falling slightly short of analysts’ projections.
The company’s owned and operated (O&O) segment experienced a year-over-year decline exceeding 20% in the fourth quarter. This downturn was largely attributed to a write-down within the Affordable Care Act (ACA) component of Fluent’s Call Solutions segment. On a more positive note, Fluent’s Commerce Media Solutions (CMS) segment saw a significant quarterly revenue jump of over 65%, establishing an annual revenue rate surpassing $60 million.
Looking to the future, Fluent has outlined a strategy focusing on stabilizing its O&O business and driving growth from its CMS division. The company projects that the CMS segment will experience triple-digit year-over-year growth in fiscal year 2025, as it continues to expand its network of media partners across various sectors, including retail, grocery, ticketing, and restaurants.
Despite these optimistic growth projections for CMS, the first half of 2025 is expected to present challenges. Revenue for the first half is anticipated to be approximately flat year-over-year, factoring in the discontinuation of the ACA business in the third quarter and the seasonal nature of the CMS business. However, Fluent anticipates a double-digit growth rate for the full fiscal year 2025, suggesting a significant acceleration in the second half.
The Canaccord Genuity analyst highlighted the positive trajectory of the CMS business but also noted the financial uncertainties facing Fluent in the near term. InvestingPro analysis reveals the company is quickly burning through cash, with a negative free cash flow yield. The company may need to secure additional capital, and with the forecasted growth weighted towards the latter half of the year, Canaccord Genuity has decided to maintain its Hold rating on Fluent stock for the time being. For deeper insights into Fluent’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, Fluent Inc. has reported a 10% year-over-year decline in revenue for the fourth quarter of 2024, amounting to $65.4 million, with a widened net loss of $3.4 million compared to $1.9 million in the previous year. Despite these challenges, the company’s Commerce Media Solutions (CMS) division demonstrated remarkable growth, with a 139% increase in revenue for the quarter and 284% growth for the full year. The CMS division now contributes significantly to Fluent’s consolidated revenue, highlighting its strategic importance. Fluent’s overall revenue for the year remained flat compared to 2023, but the company managed to reduce its full-year net loss to $29.3 million from $63.2 million in 2023. Analyst Maria Ripps from Canaccord Genuity revised Fluent’s stock price target to $3.50 from $4.00, maintaining a Hold rating due to mixed earnings results and the need for potential capital raising. Fluent’s future strategy focuses on stabilizing its Owned and Operated (O&O) segment while driving growth in the CMS business, which is projected to see triple-digit growth in fiscal year 2025. The company aims for double-digit growth in its consolidated revenue for the second half of 2025, driven by expanding partnerships in various sectors.
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