Connectivity proceeds support the balance sheet, but H1 continuing revenue and EBITDA declined. A peer-derived 4.779× EV/EBITDA multiple gives $54.14 per share, -6.5% versus the October 23 close. Limited margin of safety and uncertain post-sale cash deployment keep the thesis neutral pending Q3 results.
Method: current digital advertising/media peers Angi 4.51×, Yelp 5.40× and EverQuote 7.28× EV/EBITDA give a 5.40× median. The valuation grid subtracts 6.5% for ZD H1 2026 adjusted EBITDA margin declining 1.3 percentage points (26.6% to 25.3%; 5% per point), and 5% for earnings-quality risk because the Q2 $54.8m goodwill impairment equals 71% of $76.8m adjusted EBITDA and was excluded from that measure. No balance-sheet adjustment enters the EV multiple. Thus 5.40× × (1 − 0.065 − 0.05) = 4.779×, within the peer range. FY2027E EBITDA $280.4m is an analyst flat-run-rate assumption from H1 2026 reported $140.2m × 2, not company guidance. Each Q2 segment EBITDA, including corporate overhead, is annualized and scaled by 0.9122 to reconcile to $280.4m; segment revenue proxy is H1 revenue × 2. Implicit EV multiple from the final equity bridge is 4.779×, equal to nominal. A ±2.0× move changes fair value by ±$16.04 per share (29.6% of base). Independent P/E cross-check: FY2027 consensus EPS $4.84 (MarketBeat snapshot 2026-10-26) × the 11.58× median forward P/E of Yelp 5.63×, EverQuote 11.58× and Angi 16.07× = $56.05, within +3.5% of EV-based fair value. Analyst price targets differ by provider: RBC $65 dated 2026-10-15; the valuation is independent. The vendor 3.12× ZD TTM EV/EBITDA is distorted by the Connectivity disposal and excluded from the peer median. June cash and June share count are used consistently, while later buybacks and cash uses remain an unquantified risk pending Q3 disclosure. No arbitrary liquidity reserve is subtracted. Base price gap is -6.5%; the limited margin of safety and cash-timing uncertainty support a Neutral verdict despite balance-sheet strength.
| Component | Assumption | USD/share |
|---|---|---|
| Technology & Shopping | FY2027E adjusted EBITDA $72.39m × 4.779× EV/EBITDA ÷ 34.963m shares; revenue proxy $295.8m | +9.89 |
| Gaming & Entertainment | FY2027E adjusted EBITDA $53.05m × 4.779× EV/EBITDA ÷ 34.963m shares; revenue proxy $174.8m | +7.25 |
| Health & Wellness | FY2027E adjusted EBITDA $110.18m × 4.779× EV/EBITDA ÷ 34.963m shares; revenue proxy $361.2m | +15.06 |
| Cybersecurity & Martech | FY2027E adjusted EBITDA $86.12m × 4.779× EV/EBITDA ÷ 34.963m shares; revenue proxy $277.0m | +11.77 |
| Corporate overhead | FY2027E adjusted EBITDA $-41.34m × 4.779× EV/EBITDA ÷ 34.963m shares; revenue proxy $0.0m | -5.65 |
| Net cash floor | June 30 cash $1606.112m − debt $867.640m; divided by 34.963m shares | +21.12 |
| Current income taxes payable | June 30 tax payable $185.637m ÷ 34.963m shares | -5.31 |
| Base fair value | Sum of five operating components plus net cash less taxes; equity $1892.87m ÷ 34.963m shares | +54.14 |
| Item (USD m) | FY2024 | FY2025 | FY2026E* | FY2027E* |
|---|---|---|---|---|
| Revenue — reported perimeter | 1,401.7 | 1,451.3 | 1,108.8 | 1,110.0 |
| Adjusted EBITDA — reported perimeter | 493.5 | 495.1 | 280.4 | 280.4 |
| Adjusted EBITDA margin | 35.2% | 34.1% | 25.3% | 25.3% |
| Free cash flow — combined operations | 283.7 | 287.9 | N/D — post-sale | N/D — post-sale |
| Cash at period end — consolidated | 505.9 | 607.0 | N/D — forecast | N/D — forecast |
| Metric (USD m) | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|---|---|
| Continuing revenue | 294.8 | 306.5* | 346.4* | 267.6 | 286.7 |
| Gross margin % | 86.2% | N/D — restatement | N/D — restatement | 83.4% | 84.1% |
| Net income/(loss), continuing | 14.3 | N/D — restatement | N/D — restatement | −0.8 | −52.2 |
| End-of-period cash, continuing | 439.1 | N/D — restatement | 573.8 | 519.7 | 1,606.1 |
Business model — brands and growth drivers
Technology & Shopping $76.7m Q2 2026 Operating Product reviews, shopping and technology media; Q2 sales fell 5.0% YoY. Gaming & Entertainment $46.6m Q2 2026 Operating Gaming and entertainment properties; Q2 sales rose 0.9% YoY. Health & Wellness $94.7m Q2 2026 Operating Health content and services; Q2 sales fell 4.8% and carried the goodwill impairment. Cybersecurity & Martech $68.7m Q2 2026 Operating Subscription-oriented security and marketing assets; Q2 sales rose 0.5%.
Q2 segment sales sum to $286.7m after rounding. Figures are from the August 6 issuer release; the discontinued Connectivity segment is excluded.
Legal, regulatory and risk analysis
SWOT analysis
- +$738.5m June net cash before taxes
- +Q2 adjusted EBITDA margin 26.8%
- +Four operating verticals
- +Active share repurchases
- −H1 continuing revenue fell 2.3%
- −H1 adjusted EBITDA fell 7.3%
- −Combined FCF obscures standalone cash generation
- −Health goodwill impairment
- →Post-sale reinvestment
- →Q3 disclosure clarifies continuing mix
- →Cybersecurity subscription growth
- →Selective buybacks below intrinsic value
- !Search traffic disintermediation
- !Advertising recession
- !Acquisition integration
- !Convertible dilution
Summary by assessment area
- June net cash of $738.5m supports the balance sheet.
- The Connectivity sale increases capital-allocation flexibility.
- H1 continuing revenue and adjusted EBITDA declined.
- The remaining media brands must defend audience and cash conversion.
- The $54.14 base fair value is 6.5% below the $57.89 reference close.
- Q3 execution and use of sale proceeds remain the key uncertainties.
Sources: Price: StockAnalysis and SharePrices , 2026-10-23 close. Official results: Q2 2026 release , Q1 2026 release , Q3 2025 release , FY2025 release , June 2026 10-Q , June 2025 10-Q . Market capitalization is approximately $2.0B at the cited close; the valuation uses the June 2026 filing's 34.963m shares. The 52-week range is from Aries . Short interest: approximately 4.9m shares / 16% of vendor float at September 30 settlement; float source and later exchange update require verification. Analyst target: RBC $65 dated 2026-10-15; MarketBeat EPS consensus snapshot 2026-10-26. Peer multiples: ANGI , YELP , EVER , snapshots 2026-10-23. Insider transactions, class actions, SEC investigations and shelf registrations: no verified material item included; current status N/D. Market data - last verified close 2026-10-23: ZD $57.89, market cap ~$2.0B, 52W range $22.45-$60.48, 34.963M shares outstanding (June 30 filing). Short interest: ~16% float. Estimates and scenario probabilities are analyst assumptions. ⚠️ Not investment advice.