Investing.com -- Shares of ZipRecruiter (NYSE: ZIP) tumbled 16% following a downgrade by analysts in response to its fourth quarter earnings report. The online employment marketplace reported quarterly revenue of $111.0 million and a full-year revenue of $474.0 million. Despite these figures, the company experienced a full-year net loss of ($12.9) million, equating to a net loss margin of 3%. Adjusted EBITDA for the year stood at $78.0 million, with a margin of 16%.

The company's CEO, Ian Siegel, highlighted the improvements made to their marketplace, including new product launches and strategic M&A to expand their product suite. He also noted the resilience of the business against a tough hiring environment and expressed a cautious optimism for the revenue trends in the upcoming quarters, citing internal and external indicators. ZipRecruiter's guidance for the first quarter revenue is $109 million at the midpoint, a 2% decrease from the fourth quarter of 2024 but showing improvement compared to the sequential declines in the first quarters of the previous two years.

Barclays analyst Trevor Young downgraded ZipRecruiter from Overweight to Equalweight, setting a new price target of $6.00, down from $10.00. Young pointed out that while the fourth quarter beat expectations, the mid-single-digit fiscal year 2025 EBITDA margin guidance was significantly below consensus, leading to challenges in defending the company's valuation.

Goldman Sachs analyst Eric Sheridan also adjusted his expectations, lowering the price target from $9.00 to $8.00 while maintaining a Neutral rating. Sheridan noted the company's revenue results were above expectations and management's cautious optimism for the fiscal year 2025 outlook. However, he highlighted that the company's guidance for the first quarter adjusted EBITDA was significantly below expectations due to planned investments in marketing and product initiatives.

ZipRecruiter's management is prepared to adjust operating expenses to maintain higher EBITDA margins if hiring demand deteriorates further, continuing their approach to navigate economic cycles. With the timing and shape of the labor market recovery still uncertain, analysts are taking a wait-and-see approach to a sustainable hiring rebound.

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