On Monday, Macquarie made an optimistic move on DoubleVerify (NYSE:DV), changing its stock rating from Neutral to Outperform, and setting a new price target of $40.00. The upgrade comes after a period of market reaction to the company's fourth-quarter results, which led to a notable sell-off.
The analyst from Macquarie stated that the decision to upgrade DoubleVerify was based on the belief that the negative response to the company's recent quarterly results was excessive. The company's first-quarter and full-year guidance for 2024 are approximately 2% lower than previous consensus estimates. However, this forecast accounts for four client-specific issues that are expected to be temporary.
Despite the recent downturn, the analyst expressed confidence in the future performance of DoubleVerify. The issues affecting the current guidance are seen as passing challenges, with the overall business outlook remaining stable. The analyst highlighted that while investors might need to exercise patience, there is potential for upside from the company's Meta (NASDAQ:META) measurement.
The core of DoubleVerify's anticipated growth is its Activation business. The analyst's comments suggest that this segment of the company's operations is expected to be the main driver of its expansion moving forward. The upgrade reflects a positive outlook on the company's ability to overcome short-term obstacles and capitalize on its growth opportunities.
The new price target of $40.00 indicates a level of confidence in DoubleVerify's market value, signaling an expectation for the stock to perform well in the future. The upgrade by Macquarie is a significant change in stance, as the firm moves from a neutral position to a more bullish outlook on the company's prospects.
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