RBC Capital adjusted its financial outlook on Nexxen (NASDAQ:NEXN), increasing the price target to $11 from the previous $9. The firm sustained its Outperform rating on the stock, indicating continued confidence in the company's prospects.
Nexxen, a company listed on the NASDAQ, has recently reported a robust second quarter, which RBC Capital referred to as an "inflection quarter." The firm highlighted the significant improvement in Nexxen's adjusted EBITDA, a key indicator of financial health and efficiency.
The positive adjustment in Nexxen's price target is also influenced by expectations of revenue growth in the second half of the year. RBC Capital's outlook is buoyed by Nexxen's enhanced go-to-market strategies, increasing momentum in Connected TV (CTV), anticipated political advertising contributions, and opportunities in data licensing.
RBC Capital expressed a belief that Nexxen's market position is currently underappreciated. The firm's optimism about the company's future is reflected in the revised price target, which is based on increased estimates and a more favorable view of Nexxen's margin outlook.
In summary, RBC Capital's revised price target for Nexxen underscores the firm's belief in the company's strong performance and potential for continued growth. The Outperform rating remains in place, signaling RBC Capital's expectation that Nexxen will outperform the general market or its industry peers.
In other recent news, Nexxen's first-quarter results exceeded projections, with a contribution excluding Traffic Acquisition Costs (ex-TAC) 4% higher than expected and EBITDA $1.8M above consensus. Following these robust financial results, the company initiated a new $50M share repurchase program.
These recent developments have led to positive ratings from financial firms such as RBC Capital Markets, which increased the stock's price target from $8.00 to $9.00, maintaining an Outperform rating. However, Stifel maintains a Hold rating, awaiting stronger evidence of growth in the Connected TV (CTV) segment. These are the recent developments in Nexxen International Ltd.'s financial journey.
InvestingPro Insights
Following RBC Capital's recent outlook adjustment for Nexxen, InvestingPro data and tips provide additional insights into the company's financial health and market performance. With a market capitalization of $542.64 million, Nexxen is positioned as a notable player in its sector. The company's impressive gross profit margins stand at 81.86%, reflecting a strong capability to manage costs relative to its revenue, which was reported at $334.69 million over the last twelve months as of Q1 2024.
Despite the negative P/E ratio indicating a lack of profitability over the last twelve months, analysts predict a turnaround, with net income expected to grow this year. This is consistent with the strong price performance observed, with the stock price having risen by 88.97% over the past year and currently trading near its 52-week high. Investors looking for growth opportunities might find Nexxen's stock volatility, as reflected in a 52.67% price total return over the last six months, to be a compelling aspect of its investment profile.
For those seeking deeper analysis, InvestingPro offers additional tips, including insights on Nexxen's cash position, which holds more cash than debt, and the company's liquid assets that exceed short-term obligations, providing a cushion for operational flexibility. With more tips available on InvestingPro, such as details on valuation implications and stock price movements, interested investors can explore the full list at https://www.investing.com/pro/NEXN for a comprehensive understanding of Nexxen's financial and market potential.
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