Value
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.8 |
| P/S | 9.4 |
| EV/EBITDA | 8.5 |
| Fwd P/E | 9.4 |
| PEG | 4.4 |
| Analyst target | 3.0 |
- ▸Forward P/E: 9.3x
- ▸PEG: 2.11
ZD · Why this verdict
Why Ziff Davis (ZD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ziff Davis trades above its analyst price target, generates negative free cash flow relative to net income, and has missed earnings estimates in 3 of the last 4 quarters — the combination of poor quality metrics and exhausted upside makes the current risk-reward unattractive.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Ziff Davis generates -34% free cash flow relative to net income — meaning the company consumes more cash than its accounting earnings reflect — while posting operating margin near zero and a Rule of 40 score of -3, disqualifying it from the minimum quality threshold of 4.0. Quality breakdown | Free cash flow turns positive and reaches at least 20% of net income within 12 months, and the Rule of 40 score rises above 10. | →Stable |
| CounterThe Piotroski F-Score of 8/9 and strong gross margins suggest the underlying business has real structural value, and the negative free cash flow may reflect integration spending from acquisitions rather than a structural problem. | ||
Ziff Davis has missed earnings estimates in 3 of the last 4 quarters, including misses of -5.1% and -5.1% in the most recent two periods, alongside declining revenue of -2% — indicating the business is contracting while failing to meet even reduced expectations. Earnings | The company beats earnings estimates in at least 2 of the next 4 quarters, and annual revenue growth turns positive above 2%. | →Stable |
| CounterOne quarter with a 63.8% beat suggests execution is uneven rather than uniformly declining; however, three consecutive misses outweigh a single outlier beat in evaluating execution quality. | ||
Short interest of 22% combined with a put-to-call ratio of 1.50 and implied volatility of 110% indicates substantial institutional bearish positioning — reflecting broad market concern about the quality of the business and the sustainability of its revenue base. Key risks | Short interest declines below 12% within 9 months, signaling reduced institutional concern about the business trajectory. | →Stable |
| CounterA 22% short interest in a small-cap company creates significant short-squeeze potential if fundamentals improve, which could amplify any recovery disproportionately relative to the improvement in underlying metrics. | ||
The current price of $45.85 already exceeds the analyst consensus price target implied by the resistance level of $47.54, and the asymmetry ratio is negative — meaning expected downside exceeds expected upside by 7.7% even on an optimistic scenario. Warnings | Analyst consensus price target is revised upward above $55, exceeding the current resistance target by more than 15%, to create a constructive entry opportunity. | →Stable |
| CounterThe golden cross technical setup and RSI at 54 suggest price momentum is positive despite the unfavorable valuation positioning; short-term technical strength may extend the current price further above fair value. | ||
Ziff Davis generates -34% free cash flow relative to net income — meaning the company consumes more cash than its accounting earnings reflect — while posting operating margin near zero and a Rule of 40 score of -3, disqualifying it from the minimum quality threshold of 4.0.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and reaches at least 20% of net income within 12 months, and the Rule of 40 score rises above 10.
CounterThe Piotroski F-Score of 8/9 and strong gross margins suggest the underlying business has real structural value, and the negative free cash flow may reflect integration spending from acquisitions rather than a structural problem.
Ziff Davis has missed earnings estimates in 3 of the last 4 quarters, including misses of -5.1% and -5.1% in the most recent two periods, alongside declining revenue of -2% — indicating the business is contracting while failing to meet even reduced expectations.
→StableEarnings
- Expectation
- The company beats earnings estimates in at least 2 of the next 4 quarters, and annual revenue growth turns positive above 2%.
CounterOne quarter with a 63.8% beat suggests execution is uneven rather than uniformly declining; however, three consecutive misses outweigh a single outlier beat in evaluating execution quality.
Short interest of 22% combined with a put-to-call ratio of 1.50 and implied volatility of 110% indicates substantial institutional bearish positioning — reflecting broad market concern about the quality of the business and the sustainability of its revenue base.
→StableKey risks
- Expectation
- Short interest declines below 12% within 9 months, signaling reduced institutional concern about the business trajectory.
CounterA 22% short interest in a small-cap company creates significant short-squeeze potential if fundamentals improve, which could amplify any recovery disproportionately relative to the improvement in underlying metrics.
The current price of $45.85 already exceeds the analyst consensus price target implied by the resistance level of $47.54, and the asymmetry ratio is negative — meaning expected downside exceeds expected upside by 7.7% even on an optimistic scenario.
→StableWarnings
- Expectation
- Analyst consensus price target is revised upward above $55, exceeding the current resistance target by more than 15%, to create a constructive entry opportunity.
CounterThe golden cross technical setup and RSI at 54 suggest price momentum is positive despite the unfavorable valuation positioning; short-term technical strength may extend the current price further above fair value.
Per-dimension breakdown
Quality
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.7 |
| ROA | 2.3 |
| Gross margin | 10.0 |
| Op margin | 0.5 |
| Net margin | 1.6 |
| Current ratio | 6.0 |
| FCF quality | 0.0 |
| Moat | 5.4 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: -34% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: -3 (fail)
- ▸Strong Piotroski F-Score: 8/9
Growth
2.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
| EPS growth | 2.9 |
- ▸Declining revenue: -2%
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.1 |
- ▸Overbought (RSI 73)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.5 |
| Price target | 4.2 |
| erm sentiment | 5.7 |
- ▸Light analyst coverage (5.0) — signal dampened
Insider
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $1,707,076 (0.088% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.0 |
| quality rank | 4.4 |
| growth rank | 1.3 |
Technical
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.8 |
| support resistance | 2.4 |
| 52w position | 9.1 |
| gap | 5.0 |
Risk (lower is worse)
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 0.0 |
| volatility | 3.6 |
| put call | 3.3 |
| implied vol | 0.0 |
| max pain risk | 7.0 |
| beta | 6.9 |
| debt equity | 7.9 |
- ▸High short interest: 24%
- ▸High IV: 88%
Catalyst
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 1.6 |
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.2=NEGATIVE
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-1.18
Upside
-17.6%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $1.9B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -1.2=NEGATIVE outcome against Value at 6.1 and asymmetric R:R of -1.18.
The strongest dimensions are Value at 6.1, Insider at 5.9, and Sentiment at 5.5; the weakest are Growth at 2.5, Catalyst at 2.9, and Risk (lower is worse) at 3.6. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.18 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Negative Free Cash Flow Quality
Trip ifFree cash flow remains below -10% of net income for 2 consecutive quarters.
- P2Earnings Miss Streak
Trip ifEPS surprise falls below -5% in at least 2 of the next 4 quarters.
- P3High Short Interest Bearish Positioning
Trip ifShort interest rises above 25%, exceeding the current 22% level.
- P4Stock Above Analyst Target
Trip ifPrice drops below $40, declining more than 12% from the current $45.85.