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On Monday, RBC Capital Markets adjusted its outlook on Nexxen shares (NASDAQ:NEXN), increasing the price target to $14.00, up from the previous $13.00, while reaffirming an Outperform rating on the stock. The adjustment reflects a positive stance on the company’s prospects, particularly in the areas of Connected TV (CTV) and adjusted EBITDA, which are expected to show strong performance early in the year. The optimism appears well-founded, as Nexxen has delivered impressive returns with a 98.97% gain over the past year and currently trades at $11.76, near its 52-week high.
The firm’s analyst, Matthew Swanson, noted that the results from Nexxen’s peers have been consistent with RBC’s preliminary checks, indicating a robust demand environment as the year begins. Moreover, the guidance provided by these peers suggests a cautious yet conservative approach. In light of these industry trends, expectations are set for Nexxen to post similar favorable results. The company’s strong operational efficiency is evident in its impressive 83.3% gross profit margin and $76.17 million in EBITDA. InvestingPro analysis reveals 16 additional key insights about Nexxen’s financial health and market position.
Despite the optimistic outlook, RBC Capital has slightly lowered its revenue estimate for Nexxen by 200 basis points. This revision takes into account a more conservative assessment of the macroeconomic landscape, suggesting a cautious approach amidst broader market conditions. Nevertheless, the firm’s Outperform rating stands, signaling confidence in Nexxen’s performance.
Swanson’s commentary highlighted the firm’s decision to base the price target increase on calendar year 2026 estimates. This long-term perspective underscores the belief in Nexxen’s sustained growth and profitability potential over the next few years.
Investors and market watchers will likely keep a close eye on Nexxen’s upcoming financial disclosures, particularly concerning CTV and adjusted EBITDA metrics, to gauge whether the company can meet or exceed the expectations set forth by RBC Capital Markets.
In other recent news, Nexxen International Ltd. reported its Q4 2024 earnings, significantly surpassing analysts’ expectations with earnings per share of $0.48, compared to the forecasted $0.16. The company also reported revenue of $112.3 million, exceeding the expected $105.02 million, and adjusted EBITDA rose 38% year-over-year. Additionally, Nexxen announced the repurchase of 1,498,918 Ordinary Shares under its ongoing $50 million share repurchase program, with a new $50 million program set to commence in May 2025. JMP analysts maintained their Market Outperform rating for Nexxen with an $11.00 price target, noting the company’s strategic investments in generative AI products and its partnerships with The Trade Desk (NASDAQ:TTD) and StackAdapt. Craig-Hallum initiated coverage with a Buy rating and a $15 price target, citing significant growth potential and Nexxen’s capability to maintain mid-30s EBITDA margins. The firm noted that Nexxen’s current valuation is notably lower than the average of the broader adtech category. These developments highlight Nexxen’s strong financial performance and strategic initiatives aimed at enhancing its market position.
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