On Wednesday, KeyBanc has increased the price target for Criteo S.A. (NASDAQ:CRTO) to $37.00, up from the previous target of $36.00, while keeping an Overweight rating on the shares. The adjustment comes as the company is set to report its earnings before the market opens (BMO) on May 2, 2024.
The firm's analyst notes that Criteo's underlying fundamentals appear to be stable. The delay in the deprecation of third-party cookies is seen as a significant positive development for the company. However, there is an acknowledgment of potential challenges due to the weakening of the Euro and Japanese Yen, which may pose headwinds.
Although these currency fluctuations are not expected to have a material impact on Criteo's annual financial results, they could potentially lead to softer guidance for the second quarter. Despite this, the analyst has expressed confidence in the company's performance by slightly raising the price target to $37, which is based on a 5.9x multiple of the company's estimated 2025 enterprise value to EBITDA (EV/EBITDA).
The Overweight rating suggests that KeyBanc continues to view Criteo's stock favorably, reflecting an expectation of the company's market performance to outperform the average market return over the next 12 to 18 months. The new price target indicates a modest increase in confidence in the company's value and prospects.
InvestingPro Insights
As Criteo S.A. (NASDAQ:CRTO) gears up to report its earnings on May 2, 2024, the market is closely monitoring its performance. With a current Market Cap of $1.97 billion and an adjusted P/E Ratio of 28.1 for the last twelve months as of Q4 2023, the company's valuation reflects a market that is attentive to its growth potential. Notably, the company has been experiencing a strong return over the last three months, with a 33.66% increase, which aligns with KeyBanc's positive outlook and price target adjustment.
An InvestingPro Tip highlights that management has been aggressively buying back shares, which can be a signal of confidence in the company's future and often serves to increase shareholder value. Additionally, Criteo holds more cash than debt on its balance sheet, providing a solid financial foundation that may reassure investors about the company's ability to navigate economic headwinds, such as currency fluctuations mentioned by KeyBanc's analyst.
The company's ability to generate cash flows that can sufficiently cover interest payments is another reassuring factor for investors, especially considering the potential for softer guidance in the second quarter due to currency challenges. Moreover, with a Price to Book ratio of 1.83 as of the last twelve months ending Q4 2023, the stock is trading at a valuation that may be attractive to investors seeking companies with solid fundamentals relative to their market value.
For those interested in a deeper dive into Criteo's financial health and future prospects, InvestingPro offers additional insights. There are 13 more InvestingPro Tips available, which can be accessed through the company-specific page at https://www.investing.com/pro/CRTO. To enhance your investing strategy with these comprehensive analytics, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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