DoubleVerify Holding Stock attempts a Double Bottom
Online advertising measurement firm DoubleVerify (NYSE: DV) stock has fallen (-36%) from its IPO highs in 2021.
Online advertising measurement firm DoubleVerify (NYSE: DV) stock has fallen (-36%) from its IPO highs in 2021. The bear market sell-off was brutal on the enterprise digital media monitoring platform. However, the Company has been grew at 43% in its record Q1 2022 top line and raised its fiscal 2022 revenue guidance in its fiscal Q1 2022 report. The need for accurate measurement for digital media is driving growth for the Company as more organizations migrate to digital marketing. Some of its brand name client wins include Best Buy (NYSE: BBY), KFC, Subway, Travelers, and Norwegian Cruise Lines (NASDAQ: NCLH). New activations accounted for 75% of its fiscal Q1 advertising revenues. The Company also services many of the world's largest e-commerce and retail media networks including Amazon (NASDAQ: AMZN), Target (NYSE: TGT), Walmart (NYSE: WMT), Macy's (NYSE: M), and Kroger's (NYSE: KR). DoubleVerify is the final differentiator of trust as the only leading independent verification company that doesn't have the conflicting business of also selling digital ads. Prudent investors seeking exposure in the digital adtech analytic space can watch for opportunistic pullbacks in shares of DoubleVerify.
Q1 Fiscal 2022 Earnings Release
On May 10, 2022, DoubleVerify released its fiscal first-quarter 2022 results for the quarter ending March 2020. The Company reported an earnings-per-share (EPS) profit of $0.03 excluding non-recurring items versus consensus analyst estimates for a profit of $0.07, missing estimates by (-$0.04). Revenues grew 43.1% year-over-year (YoY) to $96.72 million beating analyst estimates for $89.87 million. DoubleVerify CEO Mark Zagorski commented, "Our investments in innovation and global scale have delivered record Q1 revenue and growth rates that exceeded our expectations. Revenue and volume on both activation and measurement grew as advertisers continued to embrace and expand their relationship with DV based on our essential, unbiased solutions. Our product innovation success, industry-leading accreditations in fast growing sectors such as programmatic and CTV and broader international footprint have yielded new enterprise client wins and meaningful expansion opportunities within our existing blue-chip customer base. We have raised our full year outlook and remain confident in our ability to sustain strong growth in 2022 and beyond."
DoubleVerify provided upside revenue guidance for fiscal Q2 2022 for $101 million to $103 million versus $99.02 consensus analyst estimates. The Company raised its fiscal full-year 2022 guidance to come in between $439 million to $445 million versus $432.20 consensus analyst estimates.
Conference Call Takeaways
CEO Zagorski noted the strong start to the new fiscal year posting record revenues for the biggest fiscal Q1 in Company history. The growth was broadly distributed driven by geographic expansion and upsells with existing clients and new clients. The momentum of volume growth prompted the Company to raise its top line guidance. Its Authentic Brand Suitability (ABS) drove stronger than expected activations especially with large clients like Mondelez. DoubleVerify generated almost $25 million in adjusted EBITDA on 26% margins. The Company continues to growth position net income and margins underscoring the economics of its high margin and high growth product solutions. March 2022 posted the highest YoY growth in Company history and that acceleration continues into fiscal Q2 2022. Activations account for 61% of total advertising revenues as the Company saw it spike to 75% of advertising revenues in the first quarter led by volume and stronger-than-expected organic ad impressions. Growth in premium product adoption and enhanced pricing tiers contributed to the top line. He noted that activation and measurement go hand in hand, "When we engage a client, we immediately introduce them to the performance opportunities embedded in this process, expanding our relationship with them across new geographies and new solutions that feed the cycle. Advertisers are enthusiastically embracing the power of this combination." The Company has measured over 225 billion Authentic Ads which have been benchmarked for attention to help clients better analyze and gain insights into performance metrics.
DV Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for DV stock. The weekly rifle chart downtrend put in a bottom near the $17.22 fib Fibonacci (fib) level before staging a reversal attempt. The weekly 5-period moving average (MA) is rising at $22.32 towards the 15-period MA at $23.69. The weekly stochastic bounced back up towards the 40-band. The weekly market structure low (MSL) triggers on a breakout above $22.78. The daily rifle chart uptrend is attempting a pup breakout through the 50-period MA at $22.94 towards the upper BBs at $25.11. The daily 5-period MA support is rising at $22.78 followed by the 15-period MA at $22.05. Prudent investors can look for opportunistic pullback levels at the $21.77 fib, $20.56, $19.77 fib, $18.58 fib, $17.22 fib, $14.01 fib, $13.61 fib, and the $12.29 fib level. Upside trajectories range from the $26.08 fib up towards the $31.54 fib level.
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