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Outbrain Inc. OB shares have plummeted 39.2% in three months against the 8.1% decline of its industry and the 7.5% fall in the Zacks S&P 500 Composite.
Three Months' Price Performance
Image Source: Zacks Investment Research
OB’s performance is significantly lower than that of its industry peers, Amadeus IT Group, S.A. AMADY and Katapult Holdings, Inc. KPLT. AMADY and KPLT have gained 10.5% and 72.6% over the past three months, respectively.
The dip in Outbrain’s shares might compel investors to buy it. However, the vital question is whether this is the right time for investors to add the stock to their portfolio. Let us dig deeper.
Teads to Boost OB’s Top Line
Outbrain has a remarkable global reach with more than 2 billion unique users and proprietary data signals via its exclusive content page with the most premium media assets. The recent acquisition of Teads strengthens OB’s global reach since the acquired company has more than 50 joint business partnerships with leading premium brands across the globe, including Apple, Visa, Louis Vuitton, Nissan and McDonald’s.
These partnerships generate $5-$20 million per year on average. Therefore, it is evident that partnerships as such will contribute significantly to Outbrain’s top line.
Outbrain Benefits From Media Owner Partnerships
OB is focusing on deepening its premium media owner partnerships. In the fourth quarter of 2024, the company renewed agreements with vital publishing partners, including Spiegel in Germany, II Messaggero in Italy and Grape in Japan. Also, Outbrain secured new business partnerships from competitors and launched new partners, including Penske Media in the United States and Prensa Iberica in Spain.
The acquisition and retention of partners portray the value proposition that OB offers in terms of relationships with premium publishers across the globe. These partnerships serve a consistent supply of unique premium assets for Outbrain while providing important user insight required to optimize its operations and predict future trends.
AI to Boost OB’s Customer Base
In the fourth quarter of 2024, more than 70% of Outbrain’s customer base used its AI-based Creative Automation suite. The creative automation suite delivers more relevant and highly targeted creatives optimized for customer engagement using OB’s predictive insights to fuel the product’s gen-AI. Management plans to use AI to create greater continuity of experience across the consumer journey, leveraging OB’s inventory environments from CTV home screens to premium publishers, as well as its in-house Creative Studio that uses data and interactivity to deliver video and viewable display assets that deliver on KPI’s of the advertisers.