Ziff Davis Inc. Common Stock (ZD)

FairStock Score: 28/100 — RISKY

Key Financials

Strengths

• Generates $290 million in annual free cash flow (16.6% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics

Concerns

• Elevated P/E of 40.8x prices in substantial future growth that may not materialize
• Revenue declining at 1.5% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of 1.3 places it in the financial distress zone—elevated bankruptcy risk
• No meaningful dividend despite modest growth—total return depends entirely on multiple expansion

AI Analysis

Ziff Davis Inc. Common Stock is a micro-cap communication services company valued at $1.8 billion. The business generates $1.5 billion in annual revenue with a 0.0% net margin and $290 million in free cash flow. From a quality standpoint, Ziff shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and distressed Altman Z-Score of 1.3 warrants caution. On valuation, the stock is commanding a steep 40.8x multiple, with trades above its Graham Number with a negative 35% margin. Growth dynamics show revenue growing at -1.5% and profit growth of -99.4%. Our composite FairStock Score of 28/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $290 million in annual free cash flow (16.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 41x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer