This is part I of a series of writeups we aim to publish where we present the compelling margin of safety in ZDGE, where even a failed turnaround can result in a 50-250% share price appreciation.
Very interesting idea. Thank you for sharing. Here are some of my thoughts.
Most important:
#1 What do you think about the deteriorating fundamentals for Zedge App? MAU are decreasing >10% YoY - down to 25M in Q1-2025 from 33M in Q1-2023.
Though it is balanced out by increasing revenue from subscribing users. I could see the AI creator feature as a strong tailwind here. Though using it briefly, I was put off by its result.
Further more
#2 Not as important but: Emojipedia.org is carried along with 5.4M - Is it really worth 5.4M? It has 5k app downloads in the play store and no revenue is reported for this division in the latest 10-k. So there is potential for additional write-offs up to 5.4M.
#3 Gurushots seems dead. 1.5 stars on Trustpilot. People are not only complaining about the monetization but also the product itself. A lot need to happen to turn this around.
Positive:
#3 Subscription revenue is inceasing - also displayed in the strong increase in the changes in subscription deferred revenue. ($594k vs $163k YoY)
Conclusion: I agree w your valuation metrics. 20M in the bank. 8-9M FCF at a 41M valuation leading to 2.5x EV/FCF Or 5x EV/ Fwd earnings. But not yet sure how to think about the falling MAU >10% YoY
Hey there! Thank you for such a thoughtful comment. I plan to address each of your concern in a part 2 of the write up , especially after we had a conversation with ZDGE’s CEO yesterday! All in all, we bought more stock after our conversation with him.
I agree I am very focused on Well Developed MAU number to stop declining. If the Well Developed MAU turn and even grow with Management continue on an AI product roadmap we could see $10/ share.
I would like to see Zedge as an ART PINTREST ($PINS).
Very interesting idea. Thank you for sharing. Here are some of my thoughts.
Most important:
#1 What do you think about the deteriorating fundamentals for Zedge App? MAU are decreasing >10% YoY - down to 25M in Q1-2025 from 33M in Q1-2023.
Though it is balanced out by increasing revenue from subscribing users. I could see the AI creator feature as a strong tailwind here. Though using it briefly, I was put off by its result.
Further more
#2 Not as important but: Emojipedia.org is carried along with 5.4M - Is it really worth 5.4M? It has 5k app downloads in the play store and no revenue is reported for this division in the latest 10-k. So there is potential for additional write-offs up to 5.4M.
#3 Gurushots seems dead. 1.5 stars on Trustpilot. People are not only complaining about the monetization but also the product itself. A lot need to happen to turn this around.
Positive:
#3 Subscription revenue is inceasing - also displayed in the strong increase in the changes in subscription deferred revenue. ($594k vs $163k YoY)
Conclusion: I agree w your valuation metrics. 20M in the bank. 8-9M FCF at a 41M valuation leading to 2.5x EV/FCF Or 5x EV/ Fwd earnings. But not yet sure how to think about the falling MAU >10% YoY
Hey there! Thank you for such a thoughtful comment. I plan to address each of your concern in a part 2 of the write up , especially after we had a conversation with ZDGE’s CEO yesterday! All in all, we bought more stock after our conversation with him.
Thanks a lot for reading!
I agree I am very focused on Well Developed MAU number to stop declining. If the Well Developed MAU turn and even grow with Management continue on an AI product roadmap we could see $10/ share.
I would like to see Zedge as an ART PINTREST ($PINS).
Emojipedia revenues are 100% advertising revenue, Emojipedia revenues are consolidated in “Zedge App” Ad revenues.