Founder at Stock Spin-off Investing, Stock Spin-Off Investing

Richard Howe

Founder at Stock Spin-off Investing

Stock Spin-Off Investing

Generate attractive returns by taking advantage of inefficiencies in the stock spin-off market.

Stock Spin-offs

Event-Driven

<ul><li>Last week, the company agreed to sell its Connectivity division for $1.2BN, a price that exceeded the company’s entire market capitalization at the time of the announcement.</li><li>The sale demonstrates that the public market has been significantly undervaluing Ziff Davis’s underlying assets.</li><li>Following updated assumptions in my sum-of-the-parts (SOTP) analysis, I estimate fair value at $63 per share, implying roughly ~50% upside from the current stock price</li></ul>

Last week, the company agreed to sell its Connectivity division for $1.2BN, a price that exceeded the company’s entire market capitalization at the time of the announcement.The sale demonstrates that the public market has been significantly undervaluing Ziff Davis’s underlying assets.Following updated assumptions in my sum-of-the-parts (SOTP) analysis, I estimate fair value at $63 per share, implying roughly ~50% upside from the current stock price

Ziff Davis: A $1.2BN Sale Highlights Hidden Value

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Ziff Davis recently stunned investors with a transaction that exposed a striking valuation paradox.</li><li>The digital media and internet company agreed to sell its connectivity division to Accenture for $1.2 billion in cash, a price that exceeded Ziff Davis’ market capitalization prior to the announcement.</li><li>The division includes well-known internet infrastructure tools such as Ookla’s Speedtest, Downdetector, RootMetrics, and Ekahau, which together generated roughly $231 million in revenue last year—about 16% of the company’s total.</li></ul>

Ziff Davis recently stunned investors with a transaction that exposed a striking valuation paradox.The digital media and internet company agreed to sell its connectivity division to Accenture for $1.2 billion in cash, a price that exceeded Ziff Davis’ market capitalization prior to the announcement.The division includes well-known internet infrastructure tools such as Ookla’s Speedtest, Downdetector, RootMetrics, and Ekahau, which together generated roughly $231 million in revenue last year—about 16% of the company’s total.

Ziff Davis’ $1.2 Billion Accenture Deal Raises A Big Question For Investors

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Some of my favorite setups are stocks that are cheap on both an absolute and sum-of-the-parts (SOTP) basis.
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Ziff Davis fits that profile well. At ~3.7× EBITDA and ~5× free cash flow, the stock is clearly cheap on an absolute basis.
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On a SOTP basis, one can reasonably argue the stock is worth 50% to 100% more than where it currently trades.
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</ul>



Some of my favorite setups are stocks that are cheap on both an absolute and sum-of-the-parts (SOTP) basis.


Ziff Davis fits that profile well. At ~3.7× EBITDA and ~5× free cash flow, the stock is clearly cheap on an absolute basis.


On a SOTP basis, one can reasonably argue the stock is worth 50% to 100% more than where it currently trades.



<ul><li>Ziff Davis reported its third-quarter 2025 financial performance with a nearly 3% growth in revenues, though adjusted EBITDA experienced a slight decline.</li><li>This period marks the company's fifth consecutive quarter of revenue growth.</li><li>Notably, its adjusted diluted earnings per share (EPS) increased by 7%, attributed partly to an increased share repurchase activity to capitalize on the current valuation disconnect.</li></ul>

Ziff Davis reported its third-quarter 2025 financial performance with a nearly 3% growth in revenues, though adjusted EBITDA experienced a slight decline.This period marks the company's fifth consecutive quarter of revenue growth.Notably, its adjusted diluted earnings per share (EPS) increased by 7%, attributed partly to an increased share repurchase activity to capitalize on the current valuation disconnect.

Ziff Davis Is Going All-In on AI — But Can HALO & IMAGINE Become Its Next Growth Engine?

<ul><li>Ziff Davis reported its first-quarter 2025 results, revealing performance facets that present both opportunities and challenges for potential investors.</li><li>The company posted revenues of $328.6 million, reflecting a 4.5% year-over-year growth from $314.5 million in the same period last year.</li><li>Adjusted EBITDA came in slightly lower at $100.2 million, compared to $100.8 million previously, maintaining a robust margin of 30.5%.</li></ul>

Ziff Davis reported its first-quarter 2025 results, revealing performance facets that present both opportunities and challenges for potential investors.The company posted revenues of $328.6 million, reflecting a 4.5% year-over-year growth from $314.5 million in the same period last year.Adjusted EBITDA came in slightly lower at $100.2 million, compared to $100.8 million previously, maintaining a robust margin of 30.5%.

Ziff Davis Breaks Out With 12% Ad Surge—Can CNET & IGN Keep the Momentum Alive?

United States

Ziff Davis, Inc. operates as a digital media and Internet company. The Company provides portfolio which includes brands in technology, entertainment, shopping, health, cybersecurity, and martech. Ziff Davis serves customers worldwide.

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Ziff Davis (ZD US)

Ziff Davis: A $1.2BN Sale Highlights Hidden Value

Last week, the company agreed to sell its Connectivity division for $1.2BN, a price that exceeded the company’s entire market capitalization at...

Richard Howe

Ziff Davis’ $1.2 Billion Accenture Deal Raises A Big Question For Investors

Ziff Davis recently stunned investors with a transaction that exposed a striking valuation paradox. The digital media and internet company agreed...

Baptista Research

[Alert] Buy Ziff Davis

Some of my favorite setups are stocks that are cheap on both an absolute and sum-of-the-parts (SOTP) basis. Ziff Davis fits that profile well. At...

Richard Howe

Ziff Davis Is Going All-In on AI — But Can HALO & IMAGINE Become Its Next Growth Engine?

Ziff Davis reported its third-quarter 2025 financial performance with a nearly 3% growth in revenues, though adjusted EBITDA experienced a slight...

Baptista Research

Ziff Davis Breaks Out With 12% Ad Surge—Can CNET & IGN Keep the Momentum Alive?

Ziff Davis reported its first-quarter 2025 results, revealing performance facets that present both opportunities and challenges for potential...

Baptista Research

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