Criteo Trying To Rebuild A Stalled Growth Engine In Mid-Flight

As an ad tech company built around a machine learning-based ad retargeting engine, Criteo (CRTO) has had a rough go of it in recent years. Between concerns about privacy and the growing use of ad blocking software, Criteo has found it harder and harder to generate growth from what was once a very successful differentiating technology. While the company has been building up other businesses, they’re simply not big enough yet (nor will be in the near future) to offset the fundamental underlying pressures in the core business.

Expectations are low for Criteo now; low-to-mid single-digit revenue growth and mid-single-digit FCF adjusted free cash flow growth can support a fair value above $20, but 2019 is going to be a year of next-to-no growth (and possible contraction), there are still risks with changes to Google’s (GOOGL) Chrome browser, and management frankly doesn’t have much credibility with the Street. Newer offerings like sponsored products and in-app advertising could help spark a turnaround, and expectations are low, but investors will need a lot of patience.

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Criteo Trying To Rebuild A Stalled Growth Engine In Mid-Flight