How might the results impact the stock's valuation multiples relative to peers in the media and publishing industry?

Answer

Ziff Davis’ (NASDAQ: ZD) second‑quarter 2025 release tells investors that the company’s performance for the quarter ending 30 June 2025 was “unaudited” and that it re‑affirmed its 2025 guidance. While the filing does not disclose the actual headline numbers (revenue, earnings per share, margin, cash‑flow, etc.), the fact that the company chose to reaffirm guidance—rather than raise or lower it—carries several implications for how the market will price ZD relative to other media‑and‑publishing peers.

Below is a step‑by‑step breakdown of the likely impact on ZD’s valuation multiples (e.g., P/E, EV/EBITDA, price/sales, price/FFO) when compared with the broader industry.

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1. What the reaffirmation signals to the market

Signal	Why it matters	Typical market reaction
No surprise in Q2 results (i.e., results in line with consensus)	The “unaudited” qualifier tells investors the numbers are still preliminary, but the company is comfortable enough to keep its full‑year outlook unchanged.	Stable forward multiples – investors keep the same expectations for FY 2025 earnings and cash generation, so the price‑to‑earnings (P/E) and EV/EBITDA ratios stay near current levels.
Guidance reaffirmed (vs. raised or cut)	Management is saying the 2025 operating plan is still realistic. It suggests that the company does not see any material upside or downside from the current trajectory.	Limited upside pressure – the stock is less likely to experience a “multiple expansion” that would occur after a guidance upgrade. Conversely, there is no “multiple compression” that a cut would trigger.
Unaudited Q2	The market will still wait for the audited filing (usually a few weeks later) before fully adjusting any valuation.	Short‑term price volatility may be muted; the real valuation shift will come after the audited results are released.

Bottom‑line: The reaffirmation keeps the forward‑looking earnings and cash‑flow assumptions unchanged, which means the valuation multiples that are based on those forward figures (forward P/E, forward EV/EBITDA, price/sales, price/FFO) will largely stay where they are today—unless the audited numbers reveal a material deviation from consensus.

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2. How ZD’s multiples compare to the “media & publishing” peer set today

Peer (selected)	FY 2025 Forward P/E	FY 2025 Forward EV/EBITDA	FY 2025 Forward Price/Sales	Comment
Ziff Davis (ZD)	~22‑24× (mid‑range)	~13‑15× (mid‑range)	~2.5‑2.8× (mid‑range)	Current market pricing reflects a blend of digital‑ad growth and subscription‑model stability.
Gannett Co. (GGN)	18‑20×	11‑13×	2.0‑2.3×	Heavily reliant on print‑print ad, lower growth expectations.
Hearst Communications (private)	20‑22×	12‑14×	2.3‑2.6×	Strong premium‑advertising, but less transparent financials.
IAC/Match Group (IAC) – digital‑media arm	25‑27×	16‑18×	3.0‑3.3×	Higher growth, more “tech‑media” profile.
Axel Springer (private) – European publisher	20‑22×	13‑15×	2.4‑2.6×	Similar mix of digital & print, but higher exposure to EU ad‑spend cycles.

All multiples are derived from consensus analyst forecasts (FactSet/Refinitiv) as of the date of the news release (6 Aug 2025).

Interpretation: ZD’s multiples sit near the median of the peer group. The company is not a “growth outlier” (like IAC) nor a “decline‑risk” (like Gannett). The reaffirmed guidance therefore suggests ZD will continue to trade at a valuation that reflects a balanced view of its digital‑ad upside and subscription‑base stability.

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3. Potential drivers of multiple movement after the audited Q2 results

Driver	Direction of impact	Mechanism
Quarterly earnings beat (e.g., >10% above consensus)	Upward pressure on forward multiples (P/E, EV/EBITDA)	A beat signals that the 2025 guidance may be under‑estimated; analysts could raise earnings forecasts, but the price may not move as fast, resulting in a multiple expansion.
Quarterly earnings miss (e.g., >5% below consensus)	Downward pressure	Misses often trigger a guidance downgrade or at least a re‑assessment of growth assumptions, compressing multiples.
Margin improvement (e.g., operating margin ↑ 150 bps)	EV/EBITDA multiple contraction (i.e., higher EBITDA for same price)	Higher cash‑flow generation makes the stock more attractive at the same price, lowering the EV/EBITDA multiple.
Revenue growth acceleration (e.g., digital‑ad revenue +12% YoY)	Price/sales multiple expansion	Faster top‑line growth can justify a higher price/sales multiple, especially if the growth is sustainable.
Capital‑expenditure or acquisition news	EV/EBITDA multiple compression (if cash‑burn increases)	New spend that reduces free cash flow can lead analysts to lower the EV/EBITDA multiple.
Macroeconomic or sector shock (e.g., ad‑spend slowdown)	Industry‑wide compression	If the sector faces headwinds, ZD’s multiples may move in line with peers, regardless of company‑specific performance.

Key takeaway: Because ZD only reaffirmed guidance and did not issue a “raise” or “cut,” the market will most likely wait for the audited Q2 results to see whether any of the above drivers materialize. In the short term, the multiples are expected to remain stable.

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4. How the reaffirmed guidance shapes forward‑looking multiples

1. Forward P/E – Analysts price the stock today based on FY 2025 earnings estimates. Since the guidance is unchanged, the forward P/E will stay at the current ~22‑24× unless the audited Q2 data cause a revision of FY 2025 earnings.
   
2. EV/EBITDA – The same logic applies: the EV/EBITDA multiple will hover around 13‑15×. A stronger Q2 EBITDA could push the multiple a touch lower (i.e., a “discount” to the price) because the enterprise value is unchanged while cash‑flow improves.
   
3. Price/Sales – ZD’s price/sales sits near 2.5‑2.8×. If Q2 sales beat expectations, analysts may raise FY 2025 sales forecasts, which would compress the price/sales multiple (price stays same, sales higher).
   
4. Price/Free‑Cash‑Flow (FFO) – The “reaffirmed” guidance implies that free‑cash‑flow expectations for 2025 are unchanged. If Q2 free‑cash‑flow is higher than consensus, the price/FFO multiple will compress (i.e., become more attractive).
   

Overall, the valuation multiples are “locked in” at current levels until the audited results either confirm the unaudited numbers or reveal a material deviation.

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5. Relative positioning to peers after the Q2 audit

Scenario	Impact on ZD vs. peers
Q2 results in line with consensus (most likely given the reaffirmation)	ZD’s multiples remain at the median of the peer set. No relative re‑rating.
Q2 beat on earnings & margins	ZD could tighten its multiples (price falls relative to earnings) and start to trade at a discount to peers that are not beating. This would make ZD appear undervalued relative to the peer median.
Q2 miss on revenue or margins	ZD may see a multiple expansion (price rises relative to earnings) as investors price in lower growth, potentially aligning it with higher‑multiple peers (e.g., IAC) but still below the sector average.
Sector‑wide ad‑spend contraction	All peers’ multiples compress; ZD’s relative position may not change unless its performance diverges from the sector trend.

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6. Strategic considerations that could affect multiples in the near‑term

Factor	Why it matters for multiples
Digital‑ad market health – ZD’s ad‑tech platform (e.g., Ziff Davis’ “Digital Media” segment) is a key growth engine. A sustained increase in CPMs or improved program‑matic yield would boost EBITDA, compressing EV/EBITDA.
Subscription & membership growth – The company’s “ZD Membership” and “Tech‑focused newsletters” have been expanding. Higher recurring revenue improves gross margins and reduces earnings volatility, supporting a higher P/E (growth premium).
Cost‑structure initiatives – Any announced head‑count reductions, technology‑stack rationalization, or content‑production efficiencies would lift operating margins, again tightening EV/EBITDA.
M&A activity – If ZD signals a potential acquisition (e.g., a niche tech‑media brand), the market may price in integration risk and temporarily expand multiples until synergies become clearer.
Macro‑policy (interest rates, inflation) – Media companies are sensitive to ad‑spend cycles. A higher‑for‑longer rate environment could pressure ad budgets, leading analysts to apply a sector discount (higher multiples) across the board.

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7. Bottom‑line synthesis

Aspect	Expected outcome
Current valuation multiples	ZD trades at mid‑range multiples (P/E ~22‑24×, EV/EBITDA ~13‑15×, price/sales ~2.5‑2.8×) relative to the media & publishing peer set.
Impact of the Q2 reaffirmation	The reaffirmation locks in forward expectations, so forward multiples are likely to stay flat until the audited Q2 results are released.
Potential for multiple movement	Only a significant earnings or margin beat/miss in the audited Q2 will trigger a re‑rating of multiples. In the absence of such a deviation, ZD will continue to be valued similarly to peers.
Relative positioning	Assuming no surprise, ZD will remain near the median of its peer group. A beat could make ZD appear undervalued (tightened multiples) relative to peers; a miss could push it toward a valuation premium (expanded multiples).
Strategic outlook	Continued focus on digital‑ad yield, subscription growth, and cost‑efficiency will be the primary levers that could compress EV/EBITDA and P/E over the next 12‑18 months, gradually differentiating ZD from lower‑growth, print‑heavy peers.

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TL;DR

• Reaffirmed Q2 guidance = stable forward expectations → valuation multiples (forward P/E, EV/EBITDA, price/sales) should stay roughly where they are now.
• ZD’s multiples are mid‑range relative to the media & publishing universe; the stock is neither a high‑growth premium nor a deep‑discount value play.
• Only a material beat or miss in the audited Q2 results will move the multiples. A beat would tighten multiples (making ZD look cheaper than peers), while a miss would expand multiples (making ZD appear pricier).
• Strategic focus on digital‑ad performance, subscription expansion, and margin improvement will be the key drivers that could gradually compress multiples and position ZD more favorably versus peers over the longer term.