Is ZD a good stock to buy? We came across a bullish thesis on Ziff Davis, Inc. on Outside The Index’s Substack. In this article, we will summarize the bulls’ thesis on ZD. Ziff Davis, Inc.’s share was trading at $51.97 as of July 1st. ZD’s trailing and forward P/E were 44.42 and 9.64 respectively according to Yahoo Finance.
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Ziff Davis is a digital media and internet services company that operates a diversified portfolio of online brands spanning technology, shopping, cybersecurity, gaming, health, and digital marketing. The company’s modern structure traces back to J2 Global, an email-to-fax business founded in 1995 that successfully pivoted into a cash-generative acquisition platform after surviving the dot-com downturn, later acquiring the Ziff Davis brand as part of its expansion strategy.
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In 2021, the company completed the spin-off of its legacy fax business into Consensus Cloud Solutions and consolidated under the Ziff Davis name, fully transforming into a digital media and internet platform. A key recent catalyst was the sale of its Connectivity business for $1.2 billion in cash at approximately 11x EBITDA, compared with the company’s broader trading multiple near 3x EBITDA, highlighting a significant sum-of-the-parts discount embedded in the equity.
The market initially reacted with a strong share price increase, but valuation levels still imply skepticism toward the remaining portfolio despite meaningful cash generation and profitability. Management, led by CEO Vivek Shah, has emphasized aggressive capital allocation, including substantial buybacks totaling nearly a quarter of shares outstanding over time, alongside continued focus on asset monetization to unlock embedded value.
The company generates approximately $300 million in annual free cash flow, providing flexibility to reduce leverage, currently around $870 million of debt, while also funding repurchases and potentially initiating dividends. Segment analysis shows Health & Wellness as the fastest-growing business at roughly 11% growth and a potential standalone asset worth about $1.5 billion, Gaming as the highest-margin segment near 37.6%, and Technology & Shopping facing pressure with a 13% decline due to AI-related disruption concerns.
Despite perceived headwinds, Ziff Davis remains profitable and cash generative with a high-quality digital asset base, and if management continues executing its monetization and buyback strategy effectively, the stock offers a compelling rerating opportunity with meaningful upside relative to current market expectations.
Previously, we covered a bullish thesis on Ziff Davis, Inc. (ZD) by Value Don’t Lie in March 2025, which highlighted ZD’s extreme undervaluation, strong free cash flow generation, and improving capital allocation through buybacks and M&A. ZD’s stock price has appreciated by approximately 23.53% since our coverage. Outside The Index shares a similar view but emphasizes the Connectivity business sale at ~11x EBITDA versus ~3x for the overall company, reinforcing a sharper sum-of-the-parts mispricing and stronger catalyst from asset monetization, supporting a rerating thesis.
Ziff Davis, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held ZD at the end of the first quarter which was 20 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.
