Zedge Inc. Class B Common Stock (ZDGE)

FairStock Score: 48/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses with durable competitive advantages purchased at a sensible price. Zedge is a small digital marketplace—$38.0 million market cap at the 2026-10-13 close—selling ringtones, wallpapers, and a photo-challenge game. Revenue growth has been modest: fiscal 2025 revenue was $29.4 million, down from $30.1 million in fiscal 2024, though the quarter ended 2026-04-30, reported as fiscal Q3 2026, showed $8.0 million in revenue and $926,000 of net income, versus $7.8 million and $185,000 in the quarter ended 2025-04-30. The annual record is not reassuring: fiscal 2025 lost $2.4 million, fiscal 2024 lost $9.2 million, and fiscal 2023 lost $6.1 million. The Lynch category is TURNAROUND—loss in the latest year after earlier profits—so this is a recovery bet, not a compounder. Financial health is a mixed bag. Debt is minimal with D/E 0.01, trailing free cash flow is $3.4 million, an 8.8% FCF yield, and the Piotroski F-score is 7/9. Altman Z-score 2.60 and EV/EBITDA 4.28 suggest the price is not demanding if cash flow persists. But P/B 1.52 and a negative P/E of -35.75 show earnings are still unreliable. The moat is thin; apps face low switching costs and many substitutes. At $2.86, the market is pricing in more than the trailing losses but less than a healthy earnings stream. I would want sustained positive quarterly net income and revenue growth before calling it a true value opportunity.

In plain English: Zedge makes apps for phone ringtones, wallpapers, and a photo game, and it also has an AI wallpaper tool. The company is small and has lost money in its last few full years, though some recent quarters were profitable and it generates cash. At $2.86 a share, the price looks more cheap than expensive based on the cash it produces, but the uneven profits mean it is not clearly a bargain.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-04-30) · fiscal Q2 2026 10-Q (period ended 2026-01-31) · fiscal Q1 2026 10-Q (period ended 2025-10-31) · fiscal Q3 2025 10-Q (period ended 2025-04-30) · FY2025 10-K (period ended 2025-07-31) · FY2024 10-K (period ended 2024-07-31) · FY2023 10-K (period ended 2023-07-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer