KeyBanc raises Criteo stock target on solid fundamentals

KeyBanc raised its price target on Criteo SA (NASDAQ: CRTO ) to $37.00 from the previous price target of $36.00 on Wednesday, while maintaining an Overweight rating on the stock. The change comes as the company will report its earnings before the market opens on May 2, 2024 (BMO).

Analysts at the firm noted that Criteo's fundamentals appear to be stable. The delayed deprecation of third-party cookies is seen as a major positive development for the company. However, there is an acknowledgment of potential challenges posed by a weaker euro and yen, which could create headwinds.

While these currency fluctuations are not expected to have a material impact on Criteo's annual financial performance, they may result in weaker second-quarter guidance. Still, analysts expressed confidence in the company's performance, slightly raising their price target to $37, which is based on 5.9 times the company's projected 2025 enterprise EBITDA value (EV/EBITDA).

An “overweight” rating shows that KeyBanc continues to be optimistic about Criteo's stock, reflecting expectations that the company's market performance will outperform average market returns over the next 12 to 18 months. The new price target shows a slight increase in confidence in the company's value and prospects.

Investment Professional Insights

As Criteo SA (NASDAQ: CRTO ) prepares to report earnings on May 2, 2024, the market is paying close attention to its results. The company currently has a market capitalization of $1.97 billion and an adjusted price-to-earnings ratio of 28.1 for the trailing 12 months to the fourth quarter of 2023. The company's valuation reflects the market's focus on its growth potential. Notably, the company has experienced strong returns over the past three months, growing 33.66%, which is consistent with KeyBanc's positive outlook and price target revision.

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InvestingPro Tip highlights that management has been actively repurchasing stock, which can be a sign of confidence in the company's future and often helps increase shareholder value. Additionally, Criteo holds more cash than debt on its balance sheet, which provides a solid financial foundation that can reassure investors that the company is well positioned to weather economic headwinds, such as currency fluctuations, which KeyBanc analysts mentioned.

The company's ability to generate enough cash flow to cover interest payments is another factor that reassures investors, especially given the likelihood of softer guidance in the second quarter due to currency challenges. Additionally, with a price-to-book ratio of 1.83 over the trailing twelve months to Q4 2023, the stock's valuation may be attractive to investors looking for a company with solid fundamentals relative to the market value .

For those interested in learning more about Criteo's financial health and future prospects, InvestingPro provides additional insights. There are also 13 InvestingPro tips available, which can be accessed through the company-specific page enhance your investing strategy with these comprehensive analyses, use the coupon code PRONEWS24 Annual or biennial Pro and Pro+ subscriptions receive an additional 10% discount.

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