On Tuesday, Nexxen (NASDAQ: NEXN) stock received an optimistic update from Needham, as the firm raised its price target on the company's shares to $12.00 from the previous $9.50. The Buy rating was reaffirmed, reflecting confidence in the company's growth trajectory. This optimism aligns with InvestingPro analysis, which suggests the stock is currently trading below its Fair Value, with shares near their 52-week high of $10.47.
The adjustment to the price target was attributed to updated financial estimates for the fiscal year 2026 and a shift in the Discounted Cash Flow (DCF) analysis to use 2025 as the base year. This methodological change effectively increased the price target for Nexxen's shares to $12.00.
Needham's analysis indicates that Nexxen's revenue and earnings per share (EPS) are expected to grow significantly. The firm retains its projection of a 10% net revenue growth and a 69% EPS growth rate for Nexxen in 2025. Several growth drivers were identified as potential catalysts for the company's share price in 2025.
Among the anticipated growth drivers, Nexxen is expected to transform its US American Depositary Receipts (ADRs) into Nasdaq-listed Ordinary shares. The company also aims to increase its end-to-end revenues, which include Demand-Side Platform (DSP) and Supply-Side Platform (SSP) revenues, from 50% to 60% of total revenues.
Furthermore, Nexxen plans to expand its revenue streams by incorporating new VIDAA Automatic Content Recognition (ACR) Connected TV (CTV) data revenues through collaborations with The Trade Desk (NASDAQ:TTD) (Buy rating) and StackAdapt.
The firm also anticipates that Nexxen will retain its new political ad agency clients and increase its CTV revenues from 36% to 40% of total revenues. The company is also expected to replicate its strong growth in display ad revenues from the previous year and double its client base in 2025.
In other recent news, Nexxen International announced its third-quarter results for 2024, outperforming expectations and leading Needham to maintain a Buy rating and raise the stock's price target to $9.50. The company also announced the initiation of a $50 million share repurchase program as part of its strategy to manage capital allocation and shareholder value.
In addition to these developments, Nexxen International has expressed its intent to delist from the AIM market, a decision to be discussed at the upcoming Annual General Meeting. RBC Capital maintains confidence in Nexxen's future, maintaining an Outperform rating and raising its price target from $9 to $11.
Furthermore, Nexxen has set a date for the release of its third quarter 2024 financial results, providing investors with an opportunity to assess the company's recent performance. The company's directors have also engaged in transactions under Rule 10b-5 as part of their planned financial management strategies.
These are recent developments in Nexxen's financial journey, providing a snapshot of the company's ongoing efforts to optimize its financial structure and return value to its shareholders.
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