ZipRecruiter faces mounting challenges as two major banks significantly cut their price targets, reflecting growing skepticism about the job platform’s near-term prospects. Goldman Sachs and JPMorgan reduced their valuations to $5 from $7, though even this appears ambitious with the stock languishing near $3.48—a 52-week low. Year-to-date, shares have plummeted over 50%, while revenue shrunk 21% annually. Despite beating Q2 revenue expectations ($112.2M vs. $111.74M forecast), the company posted a $9.5M net loss, triggering a 13% after-hours drop. Analysts blame macroeconomic headwinds, noting employers’ hiring caution directly undermines ZipRecruiter’s core business.
Glimmers of Hope Amid Struggles
Management points to sequential revenue growth—the first since 2021—and optimism for Q4 recovery, particularly in healthcare and education sectors. AI tools like "ZipIntro" saw 90% quarterly usage growth, though broader AI disruption remains minimal. The company bolstered its buyback program by $100M, signaling confidence, and maintains an 89.5% gross margin. However, analysts remain neutral, awaiting sustained double-digit growth and progress toward its long-term 30% EBITDA margin goal. With paying employers up 4% to 66,300 but revenue per employer declining, pricing pressures persist, leaving investors wary of a turnaround.
