Is ZD a good stock to buy? We came across a bullish thesis on Ziff Davis, Inc. on Value Degen’s Substack by Unemployed Value Degen and Value Don’t Lie. In this article, we will summarize the bulls’ thesis on ZD. Ziff Davis, Inc.’s share was trading at $3.9 as of March 13th. ZD’s trailing and forward P/E were 34.32 and 5.42 respectively according to Yahoo Finance.
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Ziff Davis, Inc., together with its subsidiaries, operates as a digital media and internet company in the United States and internationally. ZD has experienced a prolonged period of multiple compression since the 2022 bear market despite remaining profitable, generating strong margins, and continuing to grow.
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Its price-to-sales ratio has declined from 4.3x in 2021 to roughly 0.92x today, even though the company operates with nearly 30% EBITDA margins. Revenue growth has been uneven, peaking at $1.49 billion in 2020 before dipping to $1.36 billion in 2023, but the business has recently stabilized with five consecutive quarters of sequential revenue growth, reaching about $1.46 billion.
In response to what management views as a significant disconnect between the company’s market valuation and intrinsic value, leadership has initiated a strategic review aimed at unlocking shareholder value, emphasizing that no option is off the table. The company now provides clearer financial disclosure across its five operating segments—Connectivity, Cybersecurity, Gaming, Health and Wellness, and Technology & Shopping—allowing investors to evaluate potential sum-of-the-parts valuations.
Some of these segments appear structurally stronger than others, particularly Connectivity and Cybersecurity, which benefit from subscription-based revenue and strong demand amid rising digital threats, while other segments have faced pressure from weak consumer spending and shifts in online traffic caused by the transition from traditional search optimization to AI-driven discovery. Peer valuation comparisons suggest that four of the five segments trade at materially higher multiples than the company’s consolidated valuation, implying meaningful upside if assets are separated or sold.
While a full breakup could theoretically value the business between $3 billion and $7 billion versus its current $1.34 billion market capitalization, a more likely outcome is the sale of one or two divisions combined with continued share repurchases and selective acquisitions.
The company already trades at roughly 4.5x forward earnings and has aggressively bought back stock, reducing the share count by over 16% since 2022 while insiders have also been purchasing shares. With a strong balance sheet, manageable debt, and management now actively pursuing strategic alternatives, the situation presents a compelling case where operational stability, capital returns, and potential asset sales could significantly re-rate the stock over time.
Previously, we covered a bullish thesis on Ziff Davis, Inc. (ZD) by Value Don’t Lie in March 2025, which highlighted the company’s extreme undervaluation, stable high-margin digital media assets, and improving capital allocation through acquisitions and share buybacks. ZD’s stock price has depreciated by approximately 6.20% since our coverage. Unemployed Value Degen and Value Don’t Lie share a similar view but emphasizes on a strategic review and potential segment sales to unlock value.
Ziff Davis, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held ZD at the end of the fourth quarter which was 27 in the previous quarter. While we acknowledge the risk and potential of ZD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ZD and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
