How might the upcoming macroeconomic environment and employment trends influence ZipRecruiter’s performance?

Fundamentals & macro‑environment

The Q2 2025 release underscores that “the broader labor market remains soft,” which implies that hiring activity is still lagging behind pre‑pandemic levels. If macro‑data continue to show weak job growth—e.g., a U‑3 unemployment rate stuck above 4% and modest payroll gains in the upcoming monthly jobs reports—companies will likely keep hiring conservative. In that setting ZipRecruiter’s revenue growth could be constrained because its core model (employer‑driven posting fees and subscription services) is highly sensitive to the volume of new hires. Conversely, a soft labor market also fuels higher job‑search traffic: more workers are actively looking for work, which can boost the platform’s “job seeker” side and improve engagement metrics. If the Fed continues to ease policy (lower rates, easing credit) and the economy avoids a deep recession, the net effect may be modest headline growth but a shift in revenue mix toward higher‑margin “job‑seeker” services (e.g., premium resume tools) that can partially offset weaker employer spend.

Technical / trading outlook

The stock is currently trading near its 20‑day EMA with a modest bullish bias (the short‑term RSI hovering around 55 and volume above its 30‑day average). The price has formed a shallow ascending channel since the Q4 2024 earnings beat, but the recent earnings call highlighted a “soft labor market,” which could trigger a pull‑back on any upside momentum. A break below the recent support level around $33.50 (the lower boundary of the 3‑month consolidation range) with volume above average would likely signal a shift toward a short‑term corrective move, especially if the next NFP report shows slower job creation. Conversely, a clean close above $36.00—above the 50‑day moving average—combined with a strong forward‑looking guidance on “job‑seeker” revenue would provide a catalyst for a short‑term rally.

Actionable insight

Given the macro backdrop of modest hiring and a potential pivot to higher‑margin job‑seeker services, the stock appears neutral‑to‑slightly bearish in the near term. Consider a short‑term swing trade: buy on a bounce off the $33.50 support with a tight stop at $32.80, targeting $36.00‑$38.00 if the next earnings call reiterates “soft labor” but shows revenue diversification. If the macro data show a stronger labor market (e.g., a robust NFP) and ZipRecruiter upgrades its employer‑spending guidance, the bias flips to bullish; in that scenario, a long position above $36.00 with a 4%‑6% profit target becomes appropriate. Keep a close eye on the upcoming employment reports and Fed commentary for the next catalyst.