Back to top

Image: Bigstock

Perion Network (PERI) to Post Q2 Earnings: What to Expect?

Read MoreHide Full Article

Perion Network (PERI - Free Report) is slated to release second-quarter fiscal 2022 results on Aug 3.

For the quarter under review, the Zacks Consensus Estimate for earnings is pegged at 41 cents per share, unchanged over the past 30 days. The figure indicates an improvement of 115.79% from the year-ago quarter.

The consensus mark for revenues stands at $146.50 million, which suggests an increase of 33.57% from the year-ago quarter.

Perion’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 34.74%.

Perion Network Ltd Price and EPS Surprise

Perion Network Ltd Price and EPS Surprise

Perion Network Ltd price-eps-surprise | Perion Network Ltd Quote

Factors to Note

Perion Network’s second-quarter performance is likely to have benefited from the company’s strategy to diversify its revenue source. As a result of its diversification strategy, high-margin business segment display advertising outgrew the search advertising business segment, which impacted the bottom-line growth significantly in the last reported quarter. This is expected to have continued in the second quarter of 2022.

PERI’s display advertising revenues are expected to reflect benefits from the rising adoption of the company’s video and CTV solutions. The company’s unique offerings in video and CTV solutions have been attracting several prominent brands on the retail side, which have been expanding the company’s customer base and increasing average client spend.

One of the solutions expected to have extensively contributed to Perion Network’s display advertising revenues in the to-be-reported quarter is Smart Optimization of Responsive Traits (SORT). SORT is a proprietary cookie-free technology that delivers greater ROAS for customers than third-party cookies.

SORT is a technology outcome of the company’s investment in developing its intelligent hub, which has been driving the company’s diversification strategy and increasing operational efficiency.

Perion Network’s to-be-reported quarter’s performance is likely to have gained from its continued investments to build its central intelligent Hub, which aids in connecting all assets and demand and supply data regarding it in one single database that, in turn, increases operational efficiency. This is expected to get reflected in the company’s EBITDA numbers in the to-be-reported quarter.

Strategic acquisitions and growing partnerships may have contributed to the company’s growing display advertising revenues in the quarter to be reported. Perion Network’s recent acquisition Vidazoo — a video monetization platform — has been winning market share against competitors and might have contributed to the company’s display advertising revenues.

PERI’s second-quarter 2022 performance is expected to have benefited from its multi-year contract with Microsoft, which is expected to end in 2024.

Perion Networks is currently leveraging its partnership with Microsoft Bing into other parts of Microsoft advertising to aid in Perion’s revenue diversification strategy.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Perion has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Aspen Technology (AZPN - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aspen’s shares have returned 34.1% in the year-to-date period against the Zacks Internet - Software industry’s decline of 49.7%.

Arrow Electronics (ARW - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank #3.

ARW’s shares have fallen 4.6% in the year-to-date period compared with the Zacks Electronics - Parts Distribution industry’s decline of 7.5%.

Ballard Power Systems (BLDP - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #3.

Ballard’s shares have fallen 36.1% in the year-to-date period compared with the Zacks Electronics - Miscellaneous Components industry’s decline of 23.4%.