On Friday, BMO Capital Markets maintained its positive stance on Criteo S.A. (NASDAQ: CRTO) by increasing its price target to $55.00, up from the previous $45.00. The firm reiterated its Outperform rating on the stock, signaling confidence in the company's performance.
The upgrade follows Criteo's second-quarter results, where the company's Revenue Contribution ex-TAC surpassed consensus estimates by 1%, coupled with a significant 29% adjusted EBITDA beat.
The strong performance was partly attributed to a strategic shift in the timing of investments.
Criteo's management did not provide specific details on the anticipated benefits of Google (NASDAQ:GOOGL)'s recent policy change on cookie deprecation. However, they positioned the company as a primary beneficiary of this change. BMO Capital's analyst supported this view, expressing agreement with Criteo's optimistic outlook.
The revised price target of $55 reflects a modest 7.8 times the firm's increased FY25E adjusted EBITDA estimate.
Criteo reported record topline results, a significant increase in adjusted EBITDA margin, and raised its full-year 2024 guidance. Criteo's Q2 revenue stood at $471 million, with a 14% growth at constant currency, and adjusted EBITDA was up 67% year-over-year at $93 million.
Criteo's new solutions accounted for over half of the business in Q2, with the Retail Media segment seeing a 24% growth in Contribution ex-TAC at constant currency.
Despite potential challenges with the shift from third-party cookies to alternative IDs, Google's policy update on third-party cookies is anticipated to have a smaller-than-expected impact on Criteo's operations.
InvestingPro Insights
In light of BMO Capital Markets' upbeat assessment of Criteo S.A. (NASDAQ:CRTO), recent data from InvestingPro provides additional context to the company's financial standing. Criteo's market capitalization stands at a robust $2.66 billion, with a forward-looking P/E ratio for the last twelve months as of Q2 2024 at 22.34, indicating investor confidence in the company's earnings potential. The company's revenue growth over the last twelve months was a modest 1.64%, reflecting steady business performance.
Two InvestingPro Tips that complement this analysis are particularly noteworthy: management's aggressive share buybacks and the company's strong cash position, holding more cash than debt on its balance sheet. These actions highlight a strategic approach to enhancing shareholder value and maintaining financial stability. Additionally, Criteo's recent trading pattern, close to its 52-week high and with a significant price uptick over the last six months, underscores the market's positive reception to the company's strategic initiatives.
For readers seeking a more comprehensive analysis, InvestingPro offers a plethora of additional tips for Criteo, which can be found at https://www.investing.com/pro/CRTO. These insights could provide a deeper understanding of the company's financial health and market position, aiding investors in making more informed decisions.
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