Goldman Sachs cuts ZipRecruiter price target to $7 from $8

Published 05/12/2025, 06:03 AM
Goldman Sachs cuts ZipRecruiter price target to $7 from $8

On Monday, analysts at Goldman Sachs adjusted their outlook on ZipRecruiter (NYSE:ZIP) shares, reducing the 12-month price target from $8.00 to $7.00, while maintaining a Neutral stock rating. The stock, currently trading at $4.36, has declined over 20% in the past week and is now near its 52-week low of $4.25. The revised price target follows ZipRecruiter’s Q1 2025 earnings release, which showed the company’s total revenue and adjusted EBITDA narrowly meeting the upper end of their guidance. According to InvestingPro analysis, ZIP appears to be trading near its Fair Value, with 12 additional exclusive insights available to subscribers.

ZipRecruiter’s management reported a positive trend among employers during the first quarter and continued progress on long-term platform and product initiatives aimed at boosting activity for both job seekers and employers. The company maintains impressive gross profit margins of 89.5% and a strong current ratio of 7.02, indicating solid operational efficiency and financial stability. Despite these developments, the company’s forward-looking statements revealed a cautious stance among employers, attributed to the prevailing uncertainty in the near-term U.S. economic outlook. This sentiment was evident in the company’s revenue guidance for the next quarter, which fell below Goldman Sachs and Street estimates.

The immediate market reaction to ZipRecruiter’s management commentary was notably negative, reflecting investor concerns about macroeconomic factors affecting the company’s performance. Nonetheless, Goldman Sachs emphasized ZipRecruiter’s advantageous position in the long run, as the company stands to benefit from the ongoing shift towards online recruiting and the increasing importance of personalization and technology in the hiring process.

In light of the latest earnings report and management’s comments, Goldman Sachs has updated its operating estimates for ZipRecruiter. The firm reaffirmed its Neutral stance on the stock, signaling a cautious but balanced view of the company’s prospects amid the current economic landscape.

In other recent news, ZipRecruiter Inc. reported its first-quarter 2025 earnings, revealing a 10% year-over-year decline in revenue, totaling $110 million. Despite surpassing revenue forecasts, the company experienced a net loss of $12.8 million, nearly double the loss from the same period in 2024. The company maintains a strong balance sheet with $468 million in cash and repurchased 4.6 million shares for $27.4 million. Looking ahead, ZipRecruiter projects second-quarter revenue to reach $111 million, indicating a 1% quarter-over-quarter growth. The company remains cautiously optimistic about achieving year-over-year revenue growth by the fourth quarter of 2025. Analysts noted that while there is increased macroeconomic uncertainty, ZipRecruiter’s flexible cost structure allows it to adapt quickly to changing market conditions. The company continues to focus on technological innovations and strategic investments to enhance its recruitment marketplace.

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