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On Tuesday, DA Davidson reiterated its Buy rating on shares of Criteo S.A. (NASDAQ:CRTO), maintaining a $53.00 price target. Currently trading at $37.01, InvestingPro analysis suggests the stock is undervalued. The firm’s analysts made adjustments to their financial estimates for the company, citing currency exchange challenges due to the strengthening of the U.S. dollar against the Euro (EUR), British Pound (GBP), and South Korean Won (KRW).
The analysts noted that approximately 21% of Criteo’s Contribution ex-TAC (CexT), which excludes traffic acquisition costs, is affected by the Euro, with 4% impacted by the British Pound, and 3% by the South Korean Won in the fourth quarter. As a result, the firm has lowered its fourth-quarter CexT estimate by around $4 million to $326.3 million. Additionally, the adjusted EBITDA forecast for the same period has been revised from $117.4 million to $116.5 million. InvestingPro data shows Criteo maintains a strong financial health score of 2.92 (GOOD), with its next earnings report due on February 5, 2025.
Looking further ahead, DA Davidson has also modified its projections for the year 2025. The analysts decreased their CexT estimate by about $5 million to $1,179.5 million. Similarly, the 2025 adjusted EBITDA forecast has been slightly reduced from $386.9 million to $385.5 million.
These adjustments come after Criteo provided its fourth-quarter guidance on October 30, which did not account for the recent currency fluctuations. The firm’s analysts have recalculated the estimates to reflect the currency exchange rates since that guidance was issued. Despite these changes, DA Davidson remains optimistic about Criteo’s stock, as reflected in the maintained Buy rating and price target.
In other recent news, Criteo S.A. has announced the appointment of Michael Komasinski as its new CEO, effective from February 15, 2025. Komasinski, who brings over 20 years of experience in the AdTech sector, will succeed Megan Clarken, who is retiring but will remain in a senior advisory role. The new leadership is expected to drive Criteo’s AI-fueled transformation and strengthen its position as a leading commerce media platform.
In recent financial developments, Criteo reported robust Q3 2024 earnings, showcasing revenues of $459 million and a 9% year-over-year growth in Contribution ex-TAC at constant currency. The company’s Retail Media revenue increased by 23%, hitting $61 million, while Performance Media grew by 5%. Furthermore, Criteo doubled its brand count to 3,100 and activated media spend to $1.5 billion over the past two years.
Analysts have also been active, with BMO Capital Markets and DA Davidson adjusting their price targets for Criteo, citing slight underperformance and lower than expected revenues, respectively. KeyBanc maintained its Sector Weight rating on Criteo shares, expressing a cautious stance towards the company’s ability to meet market expectations for its Retail Media contribution. These recent developments highlight Criteo’s ongoing growth and potential in the digital advertising space.
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