Ziff Davis, Inc. (ZD): A Bull Case Theory 

We came across a bullish thesis on Ziff Davis, Inc. on Enterprising Investor’s Substack by Tyler Moody. In this article, we will summarize the bulls’ thesis on ZD. Ziff Davis, Inc.’s share was trading at $35.92 as of October 13th. ZD’s trailing and forward P/E were 24.53 and 5.14 respectively according to Yahoo Finance.

Ziff Davis (ZD) has seen its share price decline from around $80 in 2022 to roughly $38 today, driven by investor concerns over AI disruption and a sluggish advertising market. The rise of AI tools like ChatGPT and Google Gemini has sparked fears that traditional content sites, including CNET and Lifehacker, could see reduced traffic as users get answers directly from AI. However, much of ZD’s audience does not rely heavily on search-driven traffic, suggesting the company is more insulated than the market assumes. Additionally, ZD is actively protecting its content, blocking AI crawlers and pursuing legal action against OpenAI, which could result in compensation.

Beyond AI, the advertising sector has faced headwinds since 2022, but as consumer sentiment rebounds and ad budgets loosen, ZD could see renewed organic growth and steady margins. Since its 2021 spinoff from J2 Global, revenue has remained relatively flat at $1.4 billion, though recent quarters show organic growth returning. Operating margins have averaged around 15%, with free cash flow of approximately $233 million over the trailing twelve months. The balance sheet is strong, with manageable leverage, $457 million in cash, and $135 million of debt repaid in the past year.

Valuation metrics appear attractive, trading at 0.85x book value and just 7x free cash flow. While ZD does not pay a dividend, it has aggressively repurchased shares, with buybacks yielding roughly 10% annually. Overall, ZD represents a diversified digital media business with strong financials, undervalued cash flows, and shareholder-friendly capital allocation, poised to benefit once advertising trends improve.

Previously we covered a bullish thesis on Ziff Davis, Inc. (ZD) by Value Don’t Lie in March 2025, which highlighted the company’s undervaluation, high-margin stability, and capital allocation shift through buybacks and M&A. The stock has depreciated ~15% since our coverage as market concerns persisted. The thesis still stands due to strong cash flow and a solid balance sheet. Tyler Moody shares a similar view but emphasizes AI and ad-market headwinds while highlighting ZD’s resilience.

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Disclosure: None.