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DoubleVerify Reports First Public Results; Shares Pop 5.4%

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  • DV

DoubleVerify Holdings Inc. (DV) reported its first quarterly results since its IPO in April. The company’s record performance in the quarter was driven by higher CTV and Social Volume growth. Shares jumped 5.4% to close at $34.80 on May 25.

Q1 revenue came in at $67.58 million, up 32% from the prior-year period, and earnings stood at $0.04 per share compared to $0.02 per share in the prior-year period.

DoubleVerify is a digital media measurement and analytics software platform. Based on customer type, revenue increased 24% for direct advertisers, 42% for programmatic advertisers, and 18% for supply-side customers, compared to the prior-year period. (See DoubleVerify stock analysis on TipRanks)

The company’s CFO, Nicola Allais said, “In the first quarter, revenue growth was driven by continued success in launching new products and expanding market share in the programmatic, CTV and Social sectors. Additionally, we maintained strong customer retention in the quarter, evidenced by a gross revenue retention rate of over 95%…DoubleVerify continues to outpace the growth of the digital advertising market and is well positioned to deliver strong revenue growth and profitability in 2021.”

For Q2 and FY21, the company projects revenue in the range of $72 to $74 million and $322 to $326 million respectively.

Following the Q1 results, Canaccord Genuity analyst Michael Graham reiterated a Buy rating on the stock and said, “DV’s first quarter as a public company held few surprises but reinforced confidence as revenue and EBITDA both beat estimates, with guidance for Q2 and FY21 also topping expectations. Advertisers are increasing adoption of DV’s leading verification platform, and new products are extending the company’s competitive advantage and adding to growth.”

“We see these Q1 results as solidifying investor confidence in the business outlook and management’s communication strategy. Despite a somewhat premium multiple, we are encouraged by DV’s product leadership and differentiation, the still-early nature of its market penetration, and what we see as solid upside potential to our estimates around volume and possibly pricing as new products gain traction.” Graham added.

The analyst also lifted the price target of DoubleVerify stock to $44 (from $40), which implies 26.4% upside potential to current levels.

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 8 Buys and 3 Holds. The average analyst price target of $39.89 implies 14.6% upside potential to current levels.

DoubleVerify scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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