Outbrain (OB) Stock Forecast & Price Target

Outbrain Inc has demonstrated strong operational efficiency, with a controlled headcount increase of only 7% year-over-year, indicating effective cost management while expanding its workforce to support growth initiatives. The company achieved a remarkable 50% year-over-year growth in net revenues from its bidding technology platform in the third quarter of 2024, which now represents nearly 10% of total net revenues, highlighting the platform's increasing significance in its revenue mix. Additionally, Outbrain's diverse revenue streams are reflected in the continuous growth of non-feed revenues for eight consecutive quarters and an increase in revenue derived from supply beyond traditional news feeds, which rose to 30% in the fourth quarter of 2024, further supporting a positive outlook on its financial trajectory.

Outbrain Inc faces significant risks that could adversely affect its financial performance, including a potential downturn in the advertising market, limited revenue growth in connected TV (CTV), and labor shortages in AI talent, all of which could impede revenue expansion. For fiscal year 2024, the company is projecting gross revenue of $925 million, representing a slight decline of 1% year-over-year, and a decrease in earnings per share from $0.20 in FY23 to $0.09. Furthermore, the company's long-term outlook is troubling, with projections indicating a 10-year EBITDA growth rate of negative 3.4% annually, compounded by a premium valuation that suggests a market capitalization significantly higher than current levels despite declining financial metrics.