On Wednesday, Canaccord Genuity adjusted its stock price target for DoubleVerify Holdings Inc. (NYSE:DV), a software platform for digital media measurement and analytics, lowering it to $36.00 from the previous $40.00. Despite this change, the firm maintained a Buy rating on the company's stock.
The price target revision followed a series of investor meetings with DoubleVerify's CEO Mark Zagorski, CFO Nicola Allais, and SVP of Investor Relations Tejal Engman. The discussions were deemed encouraging and also featured a virtual demonstration of DoubleVerify's Pinnacle platform by Chief Innovation Officer Jack Smith and VP of Pinnacle Products Marcia Barran. The platform is central to DoubleVerify's product offerings.
During these meetings, several growth strategies were highlighted, including the expansion into social media properties, the adoption of new pre-bid optimization products, and scaling in international markets. Management also provided insights into the potential effects of Moat's upcoming withdrawal from the verification industry.
DoubleVerify's stock is currently trading at approximately 3.5 times its projected FY25 sales, which Canaccord Genuity believes undervalues the company given its high-teen growth rate and 30%+ adjusted EBITDA margins. The firm suggests that DoubleVerify's continued penetration into social media, increased adoption of its Scibids technology, and international expansion have the potential to surpass the full-year guidance.
Furthermore, Canaccord Genuity anticipates that the scaling of new products and customer logos will contribute to reducing DoubleVerify's sensitivity to the spending fluctuations of individual advertisers over time. This diversification is seen as a positive factor for the stability and growth of the company's financial performance.
In other recent news, DoubleVerify has made several noteworthy strides. The company announced the introduction of its Inflammatory Politics and News (IPN) category on Meta (NASDAQ:META), a tool designed to protect advertisers from aligning with controversial or unreliable content. This initiative is supported by DoubleVerify's Universal Content Intelligence, an AI-powered engine that ensures precise content categorization across the platform.
The company also reported a 17% increase in Q2 revenue to $156 million, driven by strong performance in social and Connected TV (CTV) measurement and a growing supply side platform business.
Moreover, DoubleVerify has signed new partners and customers, including DailyMotion and Ziff Davis, and anticipates a positive revenue impact starting early 2025 following the closure of competing services like Oracle (NYSE:ORCL)'s Moat and Grapeshot.
The company also reported an 83% gross margin and $47 million in adjusted EBITDA. These are among the recent developments that highlight DoubleVerify's continued commitment to fostering transparency and trust within the digital advertising sector.
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