Ziff Davis, Inc. (ZD) stock analysis

P/E below its 5-year median

Ziff Davis's P/E of 3.0 is below its own 5-year median of 27.1.

P/E below the industry

Ziff Davis's P/E of 3.0 is below the Communications median of 14.4.

EV/EBITDA below its 5-year median

Ziff Davis's EV/EBITDA of 4.6 is below its 5-year median of 7.8.

P/B below the industry

Ziff Davis's price-to-book of 0.83 is below the Communications median of 1.60.

Trading below fair value

The share price of $51.48 is below our fair value estimate of $79.73.

Margin of safety over 20%

The price is 35.4% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 1.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -5.4% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 457% over the last twelve months, against a 5-year average of -20.7% a year.

Growing faster than the industry

Revenue grew 10.4% over the last twelve months; the Communications median is 3.6%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin slipping

Gross margin was 84.9% over the last twelve months, against 86.1% a year earlier.

Return on equity under 15%

Return on equity was 31.5% over the last twelve months and averaged 8.6% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 2.9%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Ziff Davis's return on equity of 31.5% is above the Communications median of 3.1%.

Earnings shrank over 5 years

Net income shrank 20.7% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 43.5% over the last twelve months, against a 5-year average of 10.1%.

Net margin above the industry

Ziff Davis's net margin of 43.5% is above the Communications median of -1.4%.

High debt

Debt is 40.8% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 130% five years ago to 40.8%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 26.8% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 2.35 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.12; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Ziff Davis has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.