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Shareholders appeared to be happy with Ziff Davis, Inc.'s (NASDAQ:ZD) solid earnings report last week. Looking deeper at the numbers, we found several encouraging factors beyond the headline profit numbers.
Check out our latest analysis for Ziff Davis
The Impact Of Unusual Items On Profit
For anyone who wants to understand Ziff Davis' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$95m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. Ziff Davis took a rather significant hit from unusual items in the year to September 2024. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On Ziff Davis' Profit Performance
As we mentioned previously, the Ziff Davis' profit was hampered by unusual items in the last year. Because of this, we think Ziff Davis' underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! And on top of that, its earnings per share increased by 36% in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. While conducting our analysis, we found that Ziff Davis has 1 warning sign and it would be unwise to ignore this.
This note has only looked at a single factor that sheds light on the nature of Ziff Davis' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.