Criteo S.A. (CRTO): A Bull Case Theory

We came across a bullish thesis on Criteo S.A. on r/Valueinvesting by u/Proof-Ad8627. In this article, we will summarize the bulls’ thesis on CRTO. Criteo S.A.'s share was trading at $19.76 as of January 29th. CRTO’s trailing and forward P/E were 6.69 and 4.48 respectively according to Yahoo Finance.

Criteo (CRTO) operates in the global ad-tech industry and currently trades at valuations that imply deep skepticism about its future, creating a potentially asymmetric opportunity. The stock is valued at roughly 6.25x earnings and 5.2x free cash flow, both near historical lows, while the company maintains a net cash position of about $161 million against a roughly $1 billion market capitalization.

On an enterprise basis, CRTO trades near 3.7x EBIT, a level that suggests the market is pricing in a structural decline rather than a stable, cash-generative advertising platform. At the same time, management is aggressively returning capital, repurchasing close to 8% of the market cap annually, and insider buying at market prices signals confidence in the long-term outlook.

Criteo operates two distinct business models. Its legacy Performance Media segment drives the majority of revenue but carries lower margins and depends heavily on third-party cookies, primarily through Google Chrome. This exposure has weighed on investor sentiment due to concerns around cookie deprecation, ad blockers, and browser policy changes.

However, Criteo’s newer Retail Media business, which monetizes on-site retailer traffic using first-party shopper data, is structurally higher quality. Retail Media delivers materially better margins, grows at roughly 12% annually, and avoids reliance on third-party data, though it currently represents only about 22% of revenue.

The market’s pessimism appears excessive given that ad blockers and cookie risks have existed for years without impairing Criteo’s ability to generate cash. Google has repeatedly delayed cookie deprecation, faced antitrust pressure, and lacked clear incentives to fully eliminate third-party data.

Meanwhile, Criteo continues investing in first-party data solutions and margin expansion. If valuation multiples merely revert toward historical averages as Retail Media grows and capital returns continue, the stock could reasonably deliver 50% to 100% upside, offering an attractive margin of safety despite the well-understood risks.

Previously, we covered a bullish thesis on Zeta Global Holdings Corp. by jasmichelle7 in January 2025, which highlighted the company’s resilience after disproving short report allegations and its strong first party data advantage. Since our coverage, Zeta’s stock has appreciated by approximately 3.89%. The thesis remains intact as the company’s fundamentals and long-term growth drivers continue to strengthen.

Criteo S.A. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held CRTO at the end of the third quarter which was 18 in the previous quarter. While we acknowledge the potential of CRTO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.