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Perion Network: Cross-Selling Should Lead To Great Future Growth

Dec. 30, 2022 6:04 PM ETPerion Network Ltd. (PERI)IAS, MGNI, PUBM, TTD, TTGT19 Comments
Michele Pagliaro profile picture
Michele Pagliaro


  • Perion Network Ltd. is a global technology enterprise in digital advertising.
  • The global digital advertising market is growing by double digits.
  • Perion is growing in EBIT Margin thanks to large synergies in operating expenses and thanks to the iHUB technology engine.
  • Great Free Cash Flow should allow Perion Network Ltd. to grow also through acquisitions over the next few years.

Marketer using a computer to digital online marketing banner web icon for business and social media marketing, content marketing, viral, SEO, keyword, advertise, website, and internet marketing.

Khanchit Khirisutchalual

Perion Network Ltd. (NASDAQ:PERI) is one of the most promising global technology enterprises in digital advertising. In just two years, it has almost doubled its revenue, and above all, it has reached an Ebit Margin figure of 15.1%, which is 5

This article was written by

Michele Pagliaro profile picture
Long-time investor. Analyst of growth and value companies. The goal is to create high long-term capital growth.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of PERI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (19)

This stock have great fundamentals, but has no volume.
Years are passing the company is improving a lot, but without volume its going to be a slow,slow way up.
@Ngazediwa Hotep that's even better because you can accumulate more shares at lower prices.
For me it's very simple. As long as EPS growth is maintained at at least 30%, P/E of 15 implies 50% undervaluation (for PEG to be at fair value of 1 P/E would have to also rise to 30). So by bying for $25 or thereabout you are getting a 50% margin of safety in case the breakneck EPS growth slows down. Even with 15% EPS growth, P/E of 15 implies at least fair valuation. And that's without taking into account the cash pile already sitting on the balance sheet, which, can in itself buy some extra growth.
bhnizam79 profile picture
@ValueInvestor_82 quant rating is strong buy. Is it good to buy?
Shangrila Value profile picture
Good company, but somewhat the price now is fair, when you taking into account an upcoming recession.
Michele Pagliaro profile picture
@Shangrila Value agrees I also think the price is fair and it could be high volatility due to the upcoming recession.
sorry, but your data are totally wrong. ROCE was twice negative in 2015 and 2017 and also the other data are partially invalid.
A company that has a lacking track record (look at the historic profile before taken over by the new CEO (which is pro and contra in both directions) and is growing by acquistion is no great company. In 2012 they had more revenue than today!
Michele Pagliaro profile picture
@Senopta thanks for your comments. ROCE is the Return on Capital Employed and the formula is ROCE=EBIT/Capital Employed. To be negative EBIT has to be negative. EBIT in 2015 was $39.8M and in 2017 $10M - two positive figures so also ROCE is positive. You can check EBIT also on SA.
Jeremy Blum profile picture
@Senopta Most of the growth is organic.
@Senopta price was sub $3 mid-2019 and after a bit of growth bottomed sub $4 into the pandemic early 2020. As for the 'new' CEO and acquisitions, you may want to go back and review acquisition deal terms vs the operating leverage that ensued. Top-line growth q4 was 30% (all organic now given that Vidazoo closed Oct 2021). Adj EBITDA q4 is > 50% ex-tac. Your conclusions strain credulity!
@Michele Pagliaro perhaps you should do a deep dive on Pubm and reassess. organic growth is better than m&a driven growth. They own their infrastructure & continue to invest during tough times, so will see competitive adv as they scale & multiples Re rate. NRR very strong.
Michele Pagliaro profile picture
@MUGSLEY yes you are right will do it asap
One of my core investment positions. And I don’t have many.
The only ad-tech stock that didn't get annihilated.
Jeremy Blum profile picture
@Indy72 Two reasons.

PERI stock didn't skyrocket as much as the others.

PERI revenues and earnings haven't slowed as much as the others.
@Jeremy Blum It seems to be stuck in a limbo where the breakneck growth even at the face of a recession and ever increasing cash pile put a floor on the share price, while painful history of dubious management decisions and governance issues (equity issuance for M&A that wasn't meant to be) put a cap on the share price. Mr Market wants to see a longer track record before they allow any re-rating to occur.
Skagit profile picture

It sounds to me that "Mr. Market" is whispering plenty of clues about Perion. Consider: stock in the last year is +5.64% No, that ain't great but it ain't no Carvana, either.

Stocks often in the comparison camp include:
Magnite -40.97%
Pubmatic -63%
Trade Desk -52.45%

If you follow the stock, there have been good opportunities to buy in the low 20's or even the teens. Mr. Market seems to have given this one his blessing and while the others have more distance to recover, this one keeps improving its numbers rather than coming up (looking at YOU, Peloton!) short.
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