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Investing.com - Needham has lowered its price target on Ibotta Inc (NYSE:IBTA) to $33.00 from $70.00 while maintaining a Buy rating on the stock. The stock has declined over 54% in the past six months, though InvestingPro analysis suggests the company remains undervalued at current levels.
The price target reduction comes after Ibotta’s second-quarter results and third-quarter guidance showed pressure from two CPID (Consumer Packaged goods Incremental Demand) clients not renewing their campaigns and a salesforce reorganization. Despite these challenges, the company maintains impressive gross profit margins of 83% and a healthy current ratio of 2.37.
Needham is now modeling roughly flat revenue for Ibotta next year, which the firm believes should establish an achievable floor for estimates as the company continues to search for stability.
Despite the significant reduction in price target, Needham maintained its Buy rating, citing potential upside from CPID given the significant partial quarter revenue contribution in the second quarter from the two campaigns and upcoming enterprise pilots.
The firm noted that Ibotta shares, which were down in pre-market trading Thursday, are "likely more suitable for investors with a longer term duration" as the range of potential outcomes for the stock continues to widen.
In other recent news, Ibotta Inc. reported its second-quarter 2025 earnings, revealing revenue of $86 million, which marked a 2% year-over-year decline and fell short of analyst expectations by 5%. The earnings per share (EPS) also missed estimates, coming in at $0.49 compared to the forecasted $0.52. Following these results, several analysts have downgraded Ibotta’s stock. Goldman Sachs downgraded the company from Buy to Neutral, citing challenges in the company’s platform transition and reducing the price target to $30.00 from $58.00. Similarly, Evercore ISI downgraded Ibotta from Outperform to In Line, slashing the price target to $38.00 from $65.00 due to disappointing second-quarter results. Citizens JMP also downgraded the stock from Market Outperform to Market Perform, expressing concerns about product development delays and limited revenue visibility. These developments highlight the challenges Ibotta faces with its ongoing strategic shifts and sales reorganization.
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