Please ensure Javascript is enabled for purposes of website accessibility

Why Perion Network Stock Was Soaring Today

By Jeremy Bowman - Updated Mar 2, 2021 at 12:28PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Updated guidance lifted the ad tech stock.

What happened

Shares of Perion Network (PERI 3.09%) were surging today after the ad tech company hiked its full-year guidance just three weeks after it reported its fourth-quarter earnings report. The stock was up 26.7% as of 11:31 a.m. EST on the news.

A woman looking at digital images on a screen

Image source: Getty Images.

So what

After a strong start to the year, Perion now sees full-year revenue of $370 million to $380 million (for 14% growth at the midpoint), up from a prior range of $350 million to $370 million. It also raised adjusted EBITDA guidance to a range of $37 million to $38 million, from a range of $35 million to $37 million, ahead of an analyst presentation this morning.

For the first quarter, the company sees revenue increasing 31% to a range of $86 million to $87 million, and for adjusted EBITDA to increase from $6.2 million to $7.2 million.

Like much of the ad tech industry, Perion is benefiting from an acceleration in the transition to digital advertising, which surged in the second half of the year as screen time spiked and brands looked to attract new customers during an uncertain time. The connected-TV market, or ad-based streaming, has also seen blowout growth, often in the triple digits over the past year.

Now what

Management said its earlier guidance was conservative, and it's not often that a company raises its guidance in less than three weeks. But given the momentum in ad tech and the fact that the company normally gets 15% of its business from the travel sector (which should recover later this year), even the updated guidance could be a lowball target. And it doesn't include the potential impact of new acquisitions as the company is on the hunt for mergers and acquisitions.

Factor in the company's low price-to-earnings ratio, which is still under 30 (less than the average of the S&P 500 at 40), and the stock continues to look like a bargain even after today's surge.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Perion Network Ltd. Stock Quote
Perion Network Ltd.
PERI
$18.70 (3.09%) $0.56

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
332%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.