On Monday, Needham changed its stance on AdTheorent Holding Company Inc (NASDAQ:ADTH), downgrading the stock from Buy to Hold. The digital advertising technology company did not host an earnings call following its press release on May 2, 2024, which revealed its first-quarter financial results. AdTheorent's net revenue, excluding traffic acquisition costs (TAC), was $22.4 million, marking a 7% increase year-over-year and surpassing estimates by 2%. However, its adjusted EBITDA fell by 50% year-over-year to $0.2 million, significantly underperforming against expectations.
The company did not issue any forward-looking guidance alongside its earnings report. Earlier, on April 1, 2024, AdTheorent had announced an agreement to be acquired by Cadent, LLC. The deal, valued at approximately $324 million in cash, equates to $3.21 per share. With AdTheorent's shares currently trading at the acquisition price, Needham has revised its rating to Hold.
The acquisition by Cadent is anticipated to be finalized during the third quarter of 2024. This is contingent on the approval of AdTheorent's shareholders and regulatory bodies. Needham expressed confidence that there would be no significant obstacles to delay the closing of the transaction. The firm's decision to downgrade the stock reflects the current share price alignment with the proposed takeover value.
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