BuzzFeed (NASDAQ: BZFD) stock price is rising from the ashes. It has surged by more than 86% in 2023 and by over 190% from its lowest level in 2023. This rebound happened after the company sold its Complex in a $114 million deal.
BuzzFeed earningsBuzzFeed stock price has had a difficult ride in the past few years. After peaking at $14.5 in 2021, it has dropped and became a penny stock valued at just $66 million.
This crash happened as the company went through major headwinds, especially as its advertising revenue plunged. It has had to exit some of its key businesses like BuzzFeed News and is considering selling its Tasty and Refinery29 platforms.
BuzzFeed released relatively weak financial results this week. Revenue dropped by 26% in the fourth quarter to $75.7 million. This decline was across all segments, with the advertising revenue slipping by 25% to $31.9 million. Content revenue slumped by 34% to $27 million while its commerce segment brought in $16.7 million.
BuzzFeed faces significant risks going forward. Website traffic to its website is going down, partly because its potential users are spending most of their time on TikTok. Its time spent in the site dropped by 12% YoY in the fourth quarter. As shown below, BuzzFeed’s website traffic dropped sharply between January and February.
The other big risk is that advertisers are no longer spending in BuzzFeed and other online media platforms as they did before. This has been a common theme across all sectors, including the mainstream media.
BuzzFeed also expects that its business will continue deteriorating this year. The expectation is that its revenue will drop by between 20% and 23% to $44 million. Its EBITDA loss is expected to be between $10 million and $12 million.
BZFD stock has also done well because of the company’s investments in artificial intelligence. It hopes that AI will help its programmatic and affiliate revenue lines. However, I am a bit pessimistic about how BuzzFeed will benefit from these developments directly.
The other big BuzzFeed news was its decision to license its UK and Ireland content to The Independent. As part of this deal, its UK employees will move to The Independent and BuzzFeed will earn a small revenue from its sales.
BuzzFeed stock price forecast
The daily chart shows that the BZFD share price has made a strong bullish breakout in the past few months. It has rallied from $0.1613 in February to almost $0.5 today. The 50-day and 100-day moving averages have made a bullish crossover, which is a positive sign.
It is also attempting to move above the crucial resistance point at $0.4895, its highest swing on February 22nd. Also, it is nearing the first resistance of the Woodie pivot point. Therefore, the outlook for the stock is mildly bullish, with the next price to watch being the second resistance at $0.6590, which is about 40% above the current level.
The alternative scenario is where it pulls back and drops by 30% to the Woodie pivot point at $0.3280.
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