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Investing.com - Goldman Sachs downgraded Ibotta Inc (NYSE:IBTA) from Buy to Neutral on Thursday, slashing its price target to $30.00 from $58.00 as the company’s platform transition continues to face headwinds. The stock, currently trading at $33.88, has declined over 54% in the past six months, according to InvestingPro data.
The downgrade follows Ibotta’s Q2 2025 earnings report, which showed revenues below expectations alongside a Q3 outlook that failed to meet analyst projections. Despite challenges, InvestingPro data shows the company maintains impressive gross profit margins of 83% and a healthy current ratio of 2.37. Goldman Sachs cited the company’s ongoing shift toward more performance-based marketing (CPID-strategy) as a likely headwind for the short and medium term.
The research firm highlighted several challenges facing Ibotta , including client budget actions, the pace of implementing third-party measurement, and alignment of the go-to-market strategy, all of which "remain works in progress." Additionally, Q2 adjusted EBITDA fell below the guided range, while the Q3 outlook came in "well below prior expectations."
Despite these challenges, Ibotta’s management continues to execute share buybacks. Goldman Sachs noted that over the short term, investor focus will likely remain on the execution of this long-term strategy shift and how it translates into revenue growth in the second half of 2025 and into 2026.
While Goldman Sachs still sees long-term potential for Ibotta to benefit from secular growth themes in digital advertising and grocery/retail sectors, the firm stated it needs "better visibility into the slope & duration of this platform transition" before becoming more constructive on the stock.
In other recent news, Ibotta Inc. reported its second-quarter earnings, revealing revenue of $86 million, which represents a 2% year-over-year decline and fell short of analyst expectations by 5%. The company’s earnings per share (EPS) also missed projections, coming in at $0.49 compared to the forecasted $0.52. EBITDA was reported at $17.9 million, which is 12% below the consensus among analysts. Following these results, Evercore ISI downgraded Ibotta from Outperform to In Line, reducing its price target from $65.00 to $38.00 due to sales reorganization issues. Citizens JMP also downgraded Ibotta to Market Perform, expressing concerns over product development delays and limited revenue visibility. Despite these challenges, the market responded positively, potentially due to strategic initiatives and future guidance indicating possible growth. These developments highlight recent shifts and expectations surrounding Ibotta’s financial performance and strategic direction.
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