ZipRecruiter Inc. (ZIP) plummeted over 20% in Wednesday's trading session, as the online employment marketplace continued to face headwinds from a prolonged hiring slump and analysts downgraded the stock, citing growth concerns.
The steep decline came after Barclays downgraded ZIP to "Equal Weight" from "Overweight," lowering its price target to $6. Analysts at UBS also cut their price target on ZIP to $7 from $11, maintaining a "Neutral" rating on the stock.
The downgrades followed ZIP's Q4 2024 earnings release, which reported a 27% year-over-year decline in revenue to $474 million. The company attributed the drop to continued softness in hiring demand, as the US labor market experienced a 28-month consecutive decline in hiring activity, surpassing even the Great Recession.
Despite expressing cautious optimism about a potential recovery in 2025, ZIP's Q4 results and guidance fell short of expectations. The company reported a net loss of $12.9 million for the full year, compared to a net income in the previous year, and guided for an 11% year-over-year decline in Q1 2025 revenue.
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