PodcastOne is a buy, this analyst says

Roth Capital Markets analyst Sean McGowan maintained his “Buy” rating on PodcastOne (PodcastOne Stock Quote, Chart, News, Analysts, Financials NASDAQ:PODC) and raised his price target to $5.00 from $3.75 after the company posted September-quarter results that exceeded expectations across revenue, operating income, net income and Adjusted EBITDA.

In a report dated Nov. 17, McGowan said PodcastOne “continues to gain ground in the podcasting industry,” expanding its roster of shows while using AI tools to generate advertising leads and manage costs. He raised his revenue and Adjusted EBITDA forecasts for fiscal 2025 through 2027.

PodcastOne operates a podcast distribution platform that provides creators and advertisers with sales, marketing, public relations, production and distribution support. The company also produces vodcasts, branded podcasts, merchandise, and live events. Founded in 2012 by Norman Joel Pattiz and Kit Gray, it is headquartered in Beverly Hills, Calif.

Revenue for fiscal 2Q’26 grew 24.7% year over year to $15.2-million, ahead of McGowan’s $14.3-million estimate and representing the second-highest quarterly growth rate in the company’s public-market history.

He noted that PodcastOne now carries more than 210 shows and remains a top-nine network in the U.S. Management reiterated fiscal 2026 revenue guidance of $55-million to $60-million, but McGowan lifted his forecast to $61.8-million, implying 15% growth, and raised his fiscal 2027 and 2028 growth assumptions to 19% from about 17%.

Cost of revenue was 89.4% of revenue, an improvement from 91.7% last year but above McGowan’s 84.0% estimate due to higher stock-based compensation.

He said equity incentives remain central to management’s strategy, noting that PodcastOne is “the only podcasting pure-play public company,” giving it a unique ability to reward talent with stock. He modestly lowered his cost-of-revenue assumption for fiscal 2026 to 88.9% and raised his fiscal 2027 and 2028 estimates to 87.5% to reflect continued stock-based compensation.

Operating expenses were $16.1-million, up from $13.8-million last year and above McGowan’s $15.4-million estimate, again driven by equity compensation. He said he expects management to continue managing costs tightly and slightly reduced his opex forecasts for the next several years.

Adjusted EBITDA was $1.1-million, compared with a loss of $0.4-million last year and ahead of McGowan’s $0.6-million estimate. He increased his Adjusted EBITDA forecasts for the second half and full year of fiscal 2026 and for fiscal 2027 and 2028.

McGowan raised his price target to $5.00 to reflect the stronger-than-expected quarter and higher forward estimates. His valuation assumes that in one year the shares will trade at 1.5 times forward 12-month revenue, below the 1.7-times peer-group median for calendar 2026, and 12.2 times forward 12-month Adjusted EBITDA, above the peer-group median of 8.4 times.

McGowan expects PodcastOne to generate adjusted EBITDA of $5.4-million on revenue of $61.8-million in fiscal 2026, increasing to $9.2-million on $72.9-million in fiscal 2027.

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