Reasons Why Perion Network Stock Plunged Today

Monday, Digital Advertising Products and Services, Inc.Perion Network (NASDAQ resonance code: PERI)Perion also lowered its full-year outlook after announcing much weaker-than-expected preliminary results for the first quarter of 2024, which sent the stock plummeting by more than $401TP3 T. Perion also lowered its full-year outlook.

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In a press release issued this morning, Perion projected first quarter 2024 revenue of $157 million, an increase of 8% year-over-year, well below Wall Street's estimate of $175.5 million in revenue, or a growth rate of nearly 21%. Perion also said that adjusted EBITDA for the quarter would decline by $36% year-over-year to $20 million. 36% to $20 million.

Perion Blames Relatively Poor First Quarter Performance "MicrosoftBing implemented changes to the pricing and mechanics of advertising in its search distribution markets" that hurt search ad volume and, to a lesser extent, network ticker activity.

Perion chief executive officer Tal Jacobson insisted that the company's relationship with Microsoft "remains strong," adding that the two companies are exploring more opportunities to work together "on a variety of digital advertising solutions." The company added that the two companies are exploring more opportunities for collaboration "on a variety of digital advertising solutions".

What's next for Perion Network investors?

Perion also lowered its full-year 2024 revenue guidance to $590 million to $610 million, the midpoint of a year-over-year decline of 19%. Perion previously announced in early February that it expects revenue of $860 million to $880 million, the midpoint of a year-over-year decline.Growth 17%.

Perion Network also lowered its 2024 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) forecast to $78 million to $82 million, down from $178 million to $182 million previously.

Jacobson added that Perion's management and board of directors approved a $25 million increase to the existing stock-return authorization, reflecting their confidence in "Perion's competitive advantage to continue to succeed in the digital advertising space."

Ultimately, however, the severity of Perion's 2024 guidance cut was little consolation to investors. It's no surprise that the stock fell sharply in response.

Should you invest $1,000 in Perion Network now?

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Steve Symington does not own any of the stocks listed above.The Motley Fool holds shares of recommended Microsoft Corporation.The Motley Fool recommends the following options: long Microsoft January 2026 $395 calls and short Microsoft January 2026 $405 calls.The Motley Fool has a disclosure policy.

The Reason Perion Network's Stock Tumbled Today was originally published by The Motley Fool.