Perion Network
PERI
is firing on all cylinders. This Israel-based ad-tech provider is riding on strong business momentum and solid advertising revenue growth.
In third-quarter 2021, ended Sep 30, display advertising revenues jumped 82% year over year, driven by strong adoption of Perion’s video and CTV solutions. Video and CTV grew 245% year over year and represented 20% of display advertising revenues. Search advertising revenues increased 14% year over year.
The momentum is expected to continue over the next couple of years. Perion recently raised its 2021 and 2022 guidances due to strong contributions from Video and CTV, including Vidazoo, significant growth in average deal size, and revenue retention and continued growth in the daily average number of monetizable searches.
For 2021, Perion now expects revenues between $460 million and $470 million compared with the previous guidance of $455-$465 million. At mid-point, revenues are expected to grow 42% over 2020. Adjusted EBITDA is expected between $64 million and $65 million, reflecting 97% year-over-year growth at mid-point.
For 2022, Perion now expects revenues between $590 million and $610 million compared with the previous guidance of $580-$600 million range. At mid-point, revenues are expected to grow 29% from 2021. Adjusted EBITDA is expected between $80 million and $84 million, reflecting 27% year-over-year growth at mid-point.
Perion Network Ltd Price and Consensus
Perion Network Ltd price-consensus-chart
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Perion Network Ltd Quote
The strong business momentum is reflected by the company’s share price return. PERI shares are up 76.4% year to date against 7.5% decline of the Zacks
Internet Content
industry. The Zacks
Computer & Technology
sector rose 26.4% in the same time frame.
Recovery in advertiser spending and a spike in e-commerce-related ad spending are the key catalysts for Perion. The company is also expected to benefit from the robust performance of its Search business.
Additionally, the Vidazoo acquisition, completed in early October, has been a key catalyst. The addition of Vidazoo is helping Perion in offering more value to customers as it gets access to direct video ad supply. Elimination of intermediaries reduces media costs and increases operating efficiency.
Vidazoo is immediately accretive for Perion. The deal expands Perion’s publisher base as Vidazoo serves 1000 publishers worldwide.
Zacks Rank & Stocks to Consider
Perion currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Computer & Technology sector are
Arrow Electronics
ARW
,
Salesforce
CRM
and
Alphabet
GOOGL
.
Currently, Arrow Electronics sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
. The long-term earnings growth rate is pegged at 27.36%.
ARW shares have returned 29.1% year to date compared with the Zacks
Electronics-Parts Distribution
industry’s growth of 33.5% and the Computer & Technology sector’s return of 26.3%.
Salesforce, another Zacks Rank #1 stock, has a long-term earnings growth rate of 16.75%.
CRM is up 18.8% against the Zacks
Computer Software
industry’s growth of 39.5% and Computer & Technology sector’s return of 26.4% year to date.
The long-term earnings growth rate for Alphabet, another Zacks Rank #1 stock, is currently pegged at 25.82%.
Alphabet shares have surged 68.4% year to date compared with the Zacks
Internet-Services
industry’s growth of 43.1% and the Computer & Technology sector’s return of 26.4%.
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