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Investing.com - DoubleVerify (NYSE:DV) received a price target reduction from Needham on Monday, which lowered its target to $12.00 from $18.00 while maintaining a Buy rating on the stock. Currently trading at $9.39, the stock has fallen 51% year-to-date and is significantly below its 52-week high of $23.11. InvestingPro analysis indicates the stock is undervalued compared to its Fair Value.
Needham highlighted several positive aspects from DoubleVerify’s third-quarter performance, including revenue that exceeded the firm’s estimates and the introduction of six new AI and CTV (Connected TV) products during the quarter. The company posted impressive 14.86% revenue growth in the last twelve months, with remarkable 82.02% gross profit margins.
The research firm noted that DoubleVerify’s revenue model is increasingly shifting to a percentage of ad spending rather than fixed fees, and that CTV revenues are helping to diversify the company’s business. Needham also pointed to approximately 27% growth in the Retail Media Network segment.
Additional positive factors mentioned include DoubleVerify’s competitive position, with its top competitor IAS being taken private with leverage, and new verification opportunities in the growing GLP-1 weight loss drug advertising category.
Despite maintaining a Buy rating, Needham expressed concerns about DoubleVerify’s weaknesses, specifically citing continued weakness in the retail sector, low revenue visibility, the absence of SMB (small and medium-sized business) products, and declining profit margins.
In other recent news, DoubleVerify reported a mixed third-quarter performance, with total revenue aligning with guidance but falling approximately 1% below consensus estimates. The company, however, demonstrated strong profitability, exceeding expectations through expense discipline and operating leverage. RBC Capital lowered its price target for DoubleVerify to $20, citing a mixed quarter in terms of revenue performance, though adjusted EBITDA surpassed expectations. Similarly, Canaccord Genuity reduced its price target to $18 due to growth outlook concerns while maintaining a Buy rating. Stifel kept its Buy rating with a $20 price target despite making slight downward adjustments to revenue projections for 2025. Citizens JMP reiterated its Market Outperform rating with a $20 price target, highlighting growth drivers such as Meta Activation and DV Authentic AdVantage. BMO Capital also maintained its Outperform rating with a $27 price target, emphasizing new product deliveries expected to boost revenue in 2026.
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