Highlights

  • Taboola shows 875.42% basic EPS growth, a P/E of 8.62 and PEG of -0.45.
  • Second quarter net income was $4,317 thousand, against a net loss of $4,345 thousand.
  • Taboola repurchased 16.2 million Ordinary shares at an average $3.99 in six months.
  • Management raised full-year 2026 ex-TAC Gross Profit and Adjusted EBITDA guidance on its call.

Taboola (NASDAQ:TBLA) shares were trading at USD 3.44 on October 28, 2026, up 1.47%, alongside one-year basic EPS growth of 875.42%, a trailing twelve-month P/E of 8.62 and an expected-basis PEG of -0.45, the three figures behind its place among undervalued growth stocks. In its latest disclosures, the digital advertising technology company entered a binding settlement agreement on February 5 in a matter where it was the plaintiff, recognized reduction in workforce expenses in the second quarter, and reported second quarter 2026 revenues of $476,826 thousand in its quarterly report filed in early August.

Taboola is incorporated in Israel and lists its principal executive offices at 16 Madison Square West in New York. The company describes itself as a technology company that places ads on publisher sites, mobile apps and devices, which it calls digital properties, through an AI-powered performance advertising platform. It began operations in 2007 and works with approximately 12,000 digital property partners.

Growth: Second Quarter Earnings, Revenues and ex-TAC Gross Profit

Net income was $4,317 thousand in the second quarter against a net loss of $4,345 thousand a year earlier, and $63,383 thousand for the first six months against a net loss of $13,095 thousand. Second quarter basic earnings per share were $0.02 against $(0.01), and diluted earnings per share were $0.01 against $(0.01).

Revenues increased 2.4% to $476,826 thousand, which the company attributed mainly to a 1.9% increase in Scaled Advertisers. Gross profit was $139,479 thousand, up 2.9%. Operating profit was $7,259 thousand against $44 thousand. Ex-TAC Gross Profit, a non-GAAP measure, was $192,372 thousand, up 11.8%, and Adjusted EBITDA, also non-GAAP, was $55,491 thousand against $45,178 thousand.

The six-month result includes other income, net, of $77,000 thousand from the February settlement, recorded pre-tax and net of legal fees and other related expenses.

Valuation: P/E of 8.62, PEG of -0.45 and Cash Generation

The P/E ratio of 8.62 is measured on trailing twelve-month earnings, and the PEG ratio of -0.45 is stated on an expected basis. Net cash provided by operating activities was $139.9 million for the first six months against $95.5 million. Free Cash Flow, a non-GAAP measure, was $107,597 thousand against $70,231 thousand.

On the second quarter call, management said it continues to expect to convert free cash flow from Adjusted EBITDA at a 60% to 70% rate over any typical four-quarter period, and that it intends to return the majority of its free cash flow through share repurchases.

Capital Returns, Revolving Credit and Liquidity

Taboola repurchased 16.2 million Ordinary shares at an average price of $3.99 per share in the first six months. At June 30, 2026, $126.6 million remained under the board's buyback authorization, not including net issuance costs of $15.3 million. The program has no expiration date.

Cash and cash equivalents were $133.1 million at June 30, 2026 against $120.9 million at December 31, 2025. The 2025 Revolving Credit Agreement provides for borrowings of up to $270.0 million; $72.0 million was outstanding, due March 18, 2030, and the company was in compliance with its financial covenant, which limits its net leverage ratio.

Disclosed Risks and 2026 Outlook

The company disclosed that its revenue is tied to digital property partners, with existing partners decreasing revenue by approximately $32.4 million in the second quarter, and that global trade policy and macroeconomic conditions are volatile, though it cannot yet determine whether they will have a material effect in 2026. Reduction in workforce expenses were $5,970 thousand in the quarter. The company said it may need additional financing and might not obtain it on acceptable terms.

On the call, management said a Google policy change that deprecated its Explore More product and the removal of low-quality publishers were headwinds in the second quarter, and that revenue was below its guidance. It also recorded a one-time non-cash write-down of publisher prepayments it no longer expects to recoup.

Management raised its full-year 2026 guidance for ex-TAC Gross Profit to $772 million to $783 million and Adjusted EBITDA to $228 million to $240 million, and set revenue at $1.93 billion to $1.96 billion. For the third quarter, it expects revenue of $460 million to $473 million and ex-TAC Gross Profit of $184 million to $190 million.