DoubleVerify Drops 8% on Mixed Q3 Results

Digital media measurement and analytics software platform DoubleVerify Holdings Inc. (DV) has reported mixed results for the third quarter of 2021. Shares of the company declined 8% during the extended trading session on November 9.

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Mixed Q3 Results

The company reported quarterly earnings of 5 cents per share, up 25% year-over-year, but 1 cent lower than analysts’ estimates of 6 cents per share.

Meanwhile, revenue came in at $83.1 million, up 36% year-over-year, surpassing the Street’s estimate of $82.02 million.

Additionally, the company announced a deal to buy OpenSlate, a leading independent pre-campaign contextual targeting platform for social video and Connected TV (CTV), in a cash and stock deal of $150 million.

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Management Comments

Commenting on the results, Mark Zagorski, the CEO of DoubleVerify, said, “Our third-quarter performance demonstrates continued organic growth and reflects the ongoing value that our products create for advertisers across all digital media platforms.”

Commenting on the completed acquisition of Meetrics and the pending acquisition of OpenSlate, Zagorski said, “We expect both of these strategic investments to fuel our long-term growth trajectory and drive better business outcomes for DV customers by expanding our ability to drive media quality and performance everywhere.”

Guidance

DV forecasts revenue for the fourth quarter to be between $98 million and $103 million and adjusted EBITDA in the range of $34 million to $36 million.

For Fiscal Year 2021, the company projects revenue to be in the range of $325 million to $330 million against the consensus estimate of $327 million. Meanwhile, it expects to report adjusted EBITDA between $103 million and $105 million.

Analysts’ Take

Responding to DV’s third-quarter performance and OpenSlate acquisition news, analyst Andrew Boone of JMP Securities said, “With DoubleVerify accelerating its product roadmap via M&A (OpenSlate and Meetrics) while execution continues on its core offering, we increasingly believe DoubleVerify and Integral Ad Science (IAS) are consolidating the $20B ad fraud and verification market.”

Boone reiterated a Buy rating on the stock with a price target of $41, implying 19.74% upside potential to current levels.

Overall, the stock has a Strong Buy consensus rating based on 3 Buys and 1 Hold. The average DoubleVerify price target of $39.67 implies 15.86% upside potential to current levels. Shares of the company have gained 3.8% over the past six months.