Criteo (CRTO) Reports 3Q Results; Evercore ISI Cuts Price Target to $35
Evercore ISI reiterated a Hold rating on Criteo S.A. (NASDAQ: CRTO), and cut the price target to $35.00 (from $38.00), following the company's 3Q15 earnings results. While 3Q EBITDA of €31mm beat Street estimates by €8mm, respectively, the unchanged FY guidance implies that 4Q EBITDA was effectively lowered by €3mm, and reflects the third quarter in a row without margin expansion.
Analyst Andrew McNellis commented, "Criteo reported modestly higher 3Q revenue helped by strong net client additions, and significantly better EBITDA, as some planned costs were ultimately unrealized or pushed to 4Q. Despite the beat however, FY guidance was left unchanged, essentially implying a guide down in 4Q EBITDA. Given that this is the second quarter in a row of reduced forward EBITDA expectations on increasingly modest revenue beats, this supports some of our concerns around l/t margin scalability as well as heightened competition from both larger publisher platforms and SaaS-based full-funnel ad tech offerings, arguing for signs of renewed leverage or new growth channels for shares to find their way again."
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Shares of Criteo S.A. closed at $41.86 yesterday.