DoubleVerify (DV) PT Lowered to $26 at Canaccord Genuity

Canaccord Genuity analyst Michael Graham lowered the price target on DoubleVerify (NYSE: DV) to $26.00 (from $30.00) while maintaining a Buy rating.

The analyst commented: " DV’s Q4 results came in below expectations, with both revenue and adj. EBITDA underperforming consensus by ~3%. The softer-than-expected performance was predominantly driven by two factors: (1) a large DV customer (>$20M revenue contribution in FY24) implementing a broad-based cost-cutting initiative that is impacting its advertising and marketing partners, including DV, (2) a slowdown in brand advertiser spend leading up to and after the election. On a more positive note, the company did continue to make solid strategic progress during the quarter, including launching its content-level avoidance solution for Meta properties and a Video Exclusion List Solution on TikTok. These pre-bid activation features are already seeing significant interest, with nearly 200 customers in the pipeline. Scibids is also integrating well and delivered 50% y/y growth in FY24, exceeding the company’s expectations, and CTV measurement volumes were up 95% in Q4. That said, forward guidance was below expectations as the company opted to largely remove any contribution from the aforementioned large customer as well as factor in limited growth from the cohort of six that impacted results in FY24. With the stock down nearly 50% over the past year, reflecting several consecutive quarters of softer performance and/or guidance, we believe it may take a few quarters of consistent execution to rebuild investor confidence. That said, we acknowledge several levers, including (1) social activation products on Meta, (2) upselling the recently onboarded cohort of clients from Moat, and (3) Scibids along with other DR solutions, that could accelerate growth later this year, especially if the broader backdrop for brand spending normalizes."

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