Is ZD a good stock to buy? We came across a bullish thesis on Ziff Davis, Inc. on Value Degen’s Substack by Unemployed Value Degen and Value Don’t Lie. In this article, we will summarize the bulls’ thesis on ZD. Ziff Davis, Inc.’s share was trading at $3.9 as of March 13th. ZD’s trailing and forward P/E were 34.32 and 5.42 respectively according to Yahoo Finance.
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Ziff Davis, Inc., together with its subsidiaries, operates as a digital media and internet company in the United States and internationally. ZD has experienced a prolonged period of multiple compression since the 2022 bear market despite remaining profitable, generating strong margins, and continuing to grow.
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Its price-to-sales ratio has declined from 4.3x in 2021 to roughly 0.92x today, even though the company operates with nearly 30% EBITDA margins. Revenue growth has been uneven, peaking at $1.49 billion in 2020 before dipping to $1.36 billion in 2023, but the business has recently stabilized with five consecutive quarters of sequential revenue growth, reaching about $1.46 billion.
In response to what management views as a significant disconnect between the company’s market valuation and intrinsic value, leadership has initiated a strategic review aimed at unlocking shareholder value, emphasizing that no option is off the table. The company now provides clearer financial disclosure across its five operating segments—Connectivity, Cybersecurity, Gaming, Health and Wellness, and Technology & Shopping—allowing investors to evaluate potential sum-of-the-parts valuations.
Some of these segments appear structurally stronger than others, particularly Connectivity and Cybersecurity, which benefit from subscription-based revenue and strong demand amid rising digital threats, while other segments have faced pressure from weak consumer spending and shifts in online traffic caused by the transition from traditional search optimization to AI-driven discovery. Peer valuation comparisons suggest that four of the five segments trade at materially higher multiples than the company’s consolidated valuation, implying meaningful upside if assets are separated or sold.
While a full breakup could theoretically value the business between $3 billion and $7 billion versus its current $1.34 billion market capitalization, a more likely outcome is the sale of one or two divisions combined with continued share repurchases and selective acquisitions.
