Why Perion Network stock price plummeted today
Shares of the digital advertising services company fell Monday on the disappointing news.
stock perion network (peri -40.79%) The digital advertising products and services company plunged more than 40% on Monday after reporting much weaker-than-expected preliminary first-quarter 2024 results. Perion also lowered its annual outlook.
Perion starts the new year slowly
In a press release this morning, Perion said it expects first quarter 2024 revenue to be $157 million, up 8% year-over-year. This is well below the Wall Street model’s growth of $175.5 million, or nearly 21%. Perion also said its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter will reach $20 million, down 36% from the same quarter last year.
The relatively poor performance in the first quarter was due to “changes in advertising pricing and implemented mechanisms,” Perion said. microsoft Bing’s ‘search distribution market’ has taken a toll on search advertising volume and (to a lesser extent) web video activity.
Perion CEO Tal Jacobson insisted the company’s relationship with Microsoft “remains strong,” adding that the two companies are exploring opportunities for further collaboration “on a range of digital advertising solutions.”
What’s next for Perion Network investors?
But in the meantime, Perion lowered its 2024 revenue target to $610 million from $590 million, down 19% year over year at the midpoint of the range. Perion’s previous forecast, provided in early February, called for revenue in the range of $860 million to $880 million. growth At the midpoint, it was up 17% year-over-year.
Perion Network also lowered its 2024 adjusted EBITDA outlook to $78 million to $82 million, down from previous guidance of $178 million to $182 million.
Jacobson added that Perion’s management and board of directors approved an increase of $25 million to the existing share repurchase authorization amount. This reflects “our confidence that Perion is competitively positioned for continued success in the digital advertising environment.”
But ultimately, this offers little comfort to investors given the severity of Perion’s 2024 guidance reduction. It’s not surprising to see stocks falling so hard in response.
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has a position at and recommends Microsoft. The Motley Fool recommends the following options: Buy Microsoft’s January 2026 $395 call and sell Microsoft’s January 2026 $405 call. The Motley Fool has a disclosure policy.
