How Perion can benefit

With nearly 45% of its revenue coming from Bing, it's clear that it wouldn't take much for Perion to gain from the Microsoft-ChatGPT partnership.

Bing has roughly 3% market share in global search, but if ChatGPT significantly improves its results, the search engine could start to take market share from Google. If it does, even small gains could impact Perion. For instance, if Bing's market share rose from 3% to 4%, that would show a 33% increase in Bing's usage, and presumably, a similar increase in Perion's search revenue.

Perion hasn't commented on the potential impact of ChatGPT's inclusion in Bing, and it would be premature for it to do so. Microsoft hasn't even officially confirmed the news, which was originally reported by The Information, and we may not learn more until the new version of Bing launches.

Outside of the Bing relationship, Perion still looks like an appealing stock to own. Based on management's preliminary results, the company finished 2022 with 33% revenue growth to $636 million, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 88% to $131 million. Based on that figure, the stock is trading at just 10 times EBITDA, and it's valued at a price-to-earnings ratio of 17.5 using earnings reported under generally accepted accounting principles (GAAP).

The company is also growing rapidly in a challenging digital advertising environment. That shows its investments in connected TV and premium ad features are paying off, in addition to its partnership with Bing.

Perion's stock has been a big winner over the last three years with the share price more than tripling. But if the ChatGPT-infused version of Bing gains traction, the stock could really take off. $Microsoft(MSFT.US)$ $Perion Network(PERI.US)$