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Investing.com - Evercore ISI downgraded Ibotta Inc (NYSE:IBTA) from Outperform to In Line and slashed its price target to $38.00 from $65.00 following disappointing second-quarter results. The stock has declined over 54% in the past six months, though InvestingPro analysis suggests the company remains undervalued at current levels.
The digital rewards platform reported revenue of $86 million, representing a 2% year-over-year decline and missing Street expectations by 5%. EBITDA came in at $17.9 million, falling 12% below analyst consensus. Despite the disappointing results, the company maintains impressive gross margins of 84.7% and a healthy current ratio of 2.69, according to InvestingPro data.
Ibotta management attributed the underperformance to disruptions from its sales reorganization and slower scaling or pausing of new performance marketing clients, which created significant headwinds for the company.
The company provided third-quarter revenue guidance of $79-$84 million, representing a 17% year-over-year decline at the midpoint. EBITDA is expected to range between $9.5-$13.5 million, equating to approximately 14% margin at the midpoint.
Both guidance figures fell significantly below Street expectations, prompting Evercore ISI to materially lower its estimates for the company alongside the downgrade.
In other recent news, Ibotta Inc. reported its second-quarter 2025 earnings, which showed a slight miss on earnings per share (EPS) expectations. The company posted an actual EPS of $0.49, falling short of the forecasted $0.52. Revenue for the quarter was $86 million, representing a 2% decline compared to the previous year. Despite these figures, the market responded positively, possibly due to strategic initiatives and future guidance indicating potential growth.
Additionally, Citizens JMP downgraded Ibotta from Market Outperform to Market Perform. This decision was influenced by concerns over delays in product development and limited revenue visibility. The firm highlighted that Ibotta’s efforts to demonstrate product incrementality are taking longer than expected. Furthermore, the company is restructuring its sales force amid these challenges. These developments reflect Ibotta’s current strategic and operational landscape.
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