ATB Capital Markets analyst Martin Toner initiated protection of Zoomd Applied sciences (Zoomd Applied sciences Inventory Quote, Chart, Information, Analysts, Financials TSX:ZOMD) on Oct. 20 with an “Outperform” score and a C$4.00 one-year goal, saying the corporate is well-positioned to seize the increasing “Open Web” advert market by means of its performance-based consumer acquisition platform.
“Regardless of the pervasiveness of ‘walled backyard’ social media, the Open Web stays a rising supply of promoting and promoting spend,” Toner stated. “ZOMD’s platform identifies probably the most helpful stock for pay-for-performance promoting and delivers high-return customers to its shoppers.”
Zoomd’s know-how aggregates and optimizes advert stock throughout the open internet, utilizing proprietary algorithms to focus on high-value customers in classes resembling leisure, e-commerce, gaming, crypto, and fintech. The corporate’s consumer roster contains main international manufacturers resembling Shein and the NBA, reflecting what Toner described as “a rising checklist of high-profile manufacturers with huge advertising budgets in engaging verticals with sturdy unit economics.”
“In-app shopper spending is ~$200bn yearly, and buying new customers is the lifeblood of those companies,” he stated. “New customers for leisure, e-commerce, and on-line playing are high-value. These shoppers are prepared to pay engaging charges per consumer.”
He stated the corporate is a source-agnostic platform for cellular consumer acquisition on the Open Web.
“Purchasers pay for brand new consumer acquisition and different high-value KPIs,” he stated. “This ends in excessive ROI, alongside promoting/advertising efficiency that’s immediately tied to consumer income and has identifiable return.”
Zoomd’s fundamentals have “reworked during the last three years,” in response to Toner, with a income CAGR of roughly 50% since Q2 2023.
“The important thing to basic momentum is constantly delivering sturdy outcomes towards consumer KPIs and shoppers observing the lifetime worth of these outcomes growing older properly,” he stated. “Because the proof mounts, shoppers improve spend with ZOMD.”
He stated that insider possession stands at 27%, giving administration ample ‘pores and skin within the sport.’ Whereas he highlighted dangers from buyer focus and the corporate’s give attention to a single product line, Toner stated the management staff is “sturdy and able to taking the corporate to the subsequent stage.”
Toner stated Zoomd ought to generate $19.4-million in Adjusted EBITDA on $77.3-million of income in fiscal 2025, enhancing to $21.8-million on $95.2-million in fiscal 2026.
“Our worth goal is predicated on a DCF utilizing a weighted common value of capital of 17.0% and a terminal progress fee of three.0%,” he stated. “Our DCF mannequin implies a terminal EV/EBITDA a number of of 4.9× in 2033 and an EV/2026 EBITDA of 12.5×.”
Based in 2012 and headquartered in Vancouver with operations in Tel Aviv, Zoomd gives AI-powered, performance-based advertising instruments designed to optimize consumer acquisition and return on funding. The corporate serves shoppers throughout greater than 80 international locations in North America, Latin America, Europe, and Asia.
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