Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Taboola.com Ltd (NASDAQ: TBLA) is an Israel-based software company which through its platform Taboola powers recommendations for the open web, helping people discover things they may like. The Company’s platform, powered by deep learning and artificial intelligence, is used by digital properties, including websites, devices, and mobile apps, to drive monetization and user engagement.

Kalkine’s American Tech Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock. 

Price Performance:

• TBLA’s share price has increased by 13% over the last month. However, in the longer term, the stock has given a return of 32.52% over the last three months.

• The stock is leaning towards the upper band of its 52-week range of USD 4.45 and 52-week low price of USD 1.52, with the current price near a decent support zone of USD 2.70-USD 3.00.
• The price is currently above both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of around 56.82.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

Taboola.com Ltd has demonstrated consistent growth in both its revenue and gross profit over the years. The company's revenue has experienced a steady upward trend, rising from USD 909.2 million in FY2018 to USD 1401.20 million in FY2022. Similarly, the gross profit has shown significant growth, increasing from USD 234.2 million in FY2018 to USD 464.3 million in FY2023.

These positive financial trends indicate Taboola's ability to effectively generate revenue and manage costs, resulting in improved profitability. The consistent increase in revenue suggests the company's success in attracting customers and expanding its market presence. Additionally, the growth in gross profit highlights Taboola's ability to efficiently control production and operational expenses, leading to improved margins.These financial achievements can be attributed to factors such as Taboola's strong market position, effective business strategies, and the increasing demand for its recommendation services. The company's ability to deliver personalized content recommendations to its customers has likely contributed to its revenue growth.

Considering the positive revenue and gross profit trends, it is expected that Taboola will continue to focus on driving its top-line growth and improving profitability in the future. By leveraging its technological capabilities and expanding its customer base, the company has the potential to further enhance its financial performance and maintain its positive trajectory in the industry.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~55.13% of the total shareholding, signifying concentrated shareholding. Apollo Global Management, Inc. and Evergreen Venture Partners are the biggest shareholders, holding the maximum stake in the company at ~13.27% and ~8.15%, respectively.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q1FY23:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Price Performance:

• TBLA’s share price has increased by 13% over the last month. However, in the longer term, the stock has given a return of 32.52% over the last three months.

• The stock is leaning towards the upper band of its 52-week range of USD 4.45 and 52-week low price of USD 1.52, with the current price near a decent support zone of USD 2.70-USD 3.00.
• The price is currently above both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of around 56.82.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple-Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 10, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.