Zedge, Inc. (ZDGE): fair value, margin of safety and Wheel Score

Is ZDGE undervalued?

At 2.32 (close of 5 Nov 2026), ZDGE trades 22% under the GLS average fair value of 2.97. 1 of the 3 models that produced a value land above the price. A discount of this size counts as a positive margin of safety in every GLS scan; whether it is enough depends on the rest of the picture - the health score, the moat and the option premium below.

Only 3 of the nine models produced a value (DCF, 10 Cap, DDM); the others need a dividend, positive free cash flow or positive book value the company does not have yet, so the average rests on a narrow base.

The nightly engine files ZDGE under Speculative - it is losing money or its Piotroski health score is 3 or lower - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan.

Nine valuation models for ZDGE

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is average - ZDGE passes 5 of the nine Piotroski tests, which falls one point short of the "Piotroski 6 or more" Wheel Trade Filter. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is low at 3.8 out of 10: returns on capital, margins or the balance sheet have not shown a lasting edge yet - often a young company, a thin-margin business or one that has only recently turned profitable.

Returns on capital are thin or negative - ROIC -0.5%, ROE -0.5%, ROA -0.4% - with debt at 0.01 times equity and a free-cash-flow yield of 12.2%.

The dividend yield is 3.10% at a payout ratio of -559%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Advertising 76%, Subscription and Circulation 24% (quarter Q4 FY2026).

Institutional ownership scores 2/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales; the last recorded insider buy was on 25 Sep 2026.

Wheel Score 29: Weak

ZDGE scores 29 out of 100 on the Wheel Score, in the Weak band (under 50): it fails filter 1, options that actually trade - options too quiet (761 open interest, 105 a day); and filter 2, a real business, not a gamble - speculative (a loss, or a weak Piotroski score); and filter 4, financially healthy - Piotroski 5/9 (under 6); and filter 7, a premium worth selling - implied volatility 107% (over 80%); and filter 8, big enough - market cap $35M (under $1.0B); and filter 9, not a penny stock - price 2.32 (under $5), and the parts are thin too - value good, premium weak, moat fair, health fair, red flags fair, option trading weak, stability fair. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.

Implied volatility is 107%, above the 80% ceiling of the Wheel Trade Filter on premium. The premium looks generous, but moves of that size can blow through any strike. Chain open interest is thin - 761 contracts across every expiry - so fills at a fair price are not guaranteed; a 30-45-day put may not exist at a usable strike.

Volume runs at 125k shares a day on a market cap of $35M, with a beta of 1.29 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score rates that fair.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 11 Dec 2026, 36 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium. The shares go ex-dividend on 9 Nov 2026 (0.0200 per share), so a covered call sold before then carries a small early-assignment risk around that date.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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