A number of stocks fell in the afternoon session after President Donald Trump threatened to significantly increase tariffs on Chinese imports, reigniting trade war fears.
Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street.
Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.
While profitability is essential, it doesn’t guarantee long-term success.
Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how advertising & marketing services stocks fared in Q2, starting with Taboola (NASDAQ:TBLA).
Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. Market leaders have certainly capitalized on outsourcing trends and digital transformation initiatives to boost sales,
helping fuel a 16.9% gain for the industry over the past six months.
This performance has closely followed the S&P 500.
As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the advertising & marketing services industry, including Liberty Broadband (NASDAQ:LBRDK) and its peers.
Shares of content discovery platform Taboola (NASDAQ:TBLA) fell 1.5% in the afternoon session after the company's stock was caught in a broader market downturn that particularly affected the technology sector.
Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
A number of stocks jumped in the afternoon session after a key inflation report met expectations, bolstering hopes for a Federal Reserve interest rate cut, while a separate report indicated rising optimism among small businesses. The July Consumer Price Index (CPI) report showed annual inflation holding steady at 2.7%, aligning with forecasts and increasing the probability of a Federal Reserve interest rate cut to over 94%. Lower interest rates can stimulate the economy by making it cheaper for businesses to borrow and invest.
Content discovery platform Taboola (NASDAQ:TBLA) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 8.7% year on year to $465.5 million. Guidance for next quarter’s revenue was better than expected at $465 million at the midpoint, 0.6% above analysts’ estimates. Its non-GAAP profit of $0.10 per share was 15.6% above analysts’ consensus estimates.
Shares of content discovery platform Taboola (NASDAQ:TBLA) jumped 3.9% in the afternoon session after the company reported strong second-quarter financial results that beat expectations and raised its full-year guidance. The content discovery platform announced its revenue grew 8.7% from the previous year to $465.5 million. Its gross profit and adjusted earnings also saw double-digit percentage increases. Buoyed by these results, Taboola lifted its financial forecast for the full year. The company also actively repurchased nearly 12% of its shares in the first half of 2025 and pointed to positive early results from its new "Realize" advertising platform as a driver of growth. This strong performance prompted analysts at B.Riley to upgrade the stock to a 'Buy' rating.
Content discovery platform Taboola (NASDAQ:TBLA) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 8.7% year on year to $465.5 million. Guidance for next quarter’s revenue was better than expected at $465 million at the midpoint, 0.6% above analysts’ estimates. Its GAAP loss of $0.01 per share was in line with analysts’ consensus estimates.
A company that generates cash isn’t automatically a winner.
Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Growth boosts valuation multiples, but it doesn’t always last forever.
Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. Still, investors are uneasy as firms face challenges from AI-driven disruptors and tightening corporate budgets.
These doubts have certainly contributed to services stocks’ recent underperformance - over the past six months, the industry’s 1.8% gain has fallen behind the S&P 500’s 6.9% rise.
A stock with low volatility can be reassuring, but it doesn’t always mean strong long-term performance.
Investors who prioritize stability may miss out on higher-reward opportunities elsewhere.
Needham analyst maintains Buy rating and raises price target for Taboola due to its unique data, AI technology, exclusive deals, and expanding TAM through Realize platform and Yahoo partnership.
Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
