TBLA Stock Rises 37% in 3 Months, Outperforms Industry: Time to Buy?

Shares of Taboola.com Ltd. TBLA have rallied 36.5% in the past three months, zooming past its industry, sector and the Zacks S&P 500 composite in the same time frame.

TBLA is now trending above its 50-day simple moving average (SMA), indicating the possibility of an upside ahead. 

Taboola is a global leader in performance advertising, helping businesses grow across the open web. It believes that its Realize platform (a performance advertising platform launched in February 2025) poises it well to tap the $55 billion market dominated by Meta, Google and Amazon, also called the “walled garden.”

TBLA vs Industry, Sector, S&P

Shares of The Trade Desk TTD and Magnite Inc. MGNI, operating in the same space, have rallied 49.9% and 154.3%, respectively, in the past three months.

The Trade Desk is a prominent independent demand-side platform (DSP). With a focus on data-driven strategies and transparent pricing, it equips marketers with powerful targeting and analytics capabilities. Continuous innovation in programmatic technology strengthens its role in the dynamic digital advertising landscape.

Magnite is a leading independent sell-side advertising platform. Magnite is a pivotal player in the expanding programmatic advertising space, especially within the rapidly growing connected TV segment.

TBLA is Affordable

TBLA is currently affordable. It is trading at a price-to-earnings multiple of 20.2, lower than the industry average of 29.7. It has a Value Score of A.

Shares of Trade Desk and Magnite are trading at a premium to the industry.

The Case for TBLA

Taboola has evolved from being a native advertising leader to a company with an expanded focus on the broader performance advertising market (display and commerce formats). This strategic shift aligns with the demand for comprehensive performance solutions beyond search and social platforms. Advertising budgets continue to shift from traditional media to digital channels while online shopping is expected to grow about 8% annually through 2027, doubling the growth of physical retail, as noted by the company. TBLA is thus strongly poised to capitalize on the opportunities.

Taboola’s growth strategy encompasses driving incremental ad spend through Realize's new capabilities and focusing on a go-to-market strategy, including verticalizing its sales organization and targeting ideal customer profiles and new supply partners that offer unique data sought by advertisers. This would help drive incremental growth in advertising budgets.

Execution is showing up in the numbers. TBLA generated about $1.8 billion in revenues, over $200 million in adjusted EBITDA, and about $150 million in free cash flow last year. First-quarter results were solid with revenues improving 3%, adjusted EBITDA increasing 53%, and operating cash flow improving 48%, giving Taboola more than $216 million of cash with modest leverage. 

Banking on the momentum, Taboola expects to generate revenues between $1.84 billion and $1.89 billion in 2025. Gross profit is expected to be between $536 million and $552 million, adjusted EBITDA between $201 million and $209 million and net income between $122 million and $128 million. 

Management is reinvesting while distributing wealth to shareholders, supported by improving profitability and cash generation. It is continually increasing R&D spend, which was about 8% of revenues in 2024,  to fund AI capabilities, including Max Conversions and Abby.  Its board expanded the buyback authorization by $200 million in February 2025 (now $240 million total), leveraging a cash balance and solid free cash flow conversion.

Optimistic Analyst Sentiment on TBLA

The Zacks Consensus Estimate for 2025 and 2026 earnings has moved 2 cents and 3 cents north, respectively, in the past 60 days.

The Zacks Consensus Estimate for TBLA’s 2025 earnings per share indicates an increase of 3900% on 5.7% higher revenues.  The consensus estimate for 2026 earnings per share indicates a 7.9% increase on 6.1% higher revenues.  TBLA has a Growth Score of A. 

Parting Thoughts on TBLA Stock

Taboola offers a compelling risk-reward profile. With the efficient execution of Realize, share buybacks and improving cash generation, Taboola emerges as a prudent pick for investors. Its impressive VGM Score of A instills confidence. 

Given its affordability, growth prospects, price appreciation and optimistic analyst sentiment, this Zacks Rank #1 (Strong Buy) stock is a strong contender for addition to one’s portfolio. You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research