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Investing.com - BofA Securities upgraded DoubleVerify (NYSE:DV) from Neutral to Buy while lowering its price target to $14.00 from $18.00. The stock currently trades at $10.43, down over 51% year-to-date, with InvestingPro data indicating the shares are trading below their Fair Value.
The upgrade comes as BofA Securities views DoubleVerify as "the only company left standing in the media quality measurement space," giving it greater flexibility with research and development and innovation. This positioning appears favorable considering the company’s impressive 82% gross profit margin and overall "GOOD" financial health score.
BofA Securities analyst Omar Dessouky believes this positioning should help DoubleVerify win market share in a product segment that will remain relevant long-term.
The new price target is based on an enterprise value to calendar year 2026 EBITDA multiple of 8x, down from the previous 10x multiple. At approximately $9 per share in afterhours trading, the stock trades at 5x BofA’s CY26 EBITDA estimates.
BofA notes that competitor IAS was acquired for 8x EV/CY26 EBITDA on estimates that also assumed a 10% year-over-year growth trajectory, suggesting DoubleVerify currently trades below private market value.
In other recent news, DoubleVerify’s third-quarter results have prompted several analysts to adjust their price targets for the company. The company’s revenue exceeded some estimates but missed others, while profitability surpassed expectations, attributed to effective expense management. However, the fourth-quarter guidance has been a point of concern, with projections falling short of analyst expectations, particularly in the retail sector, which represents about 14% of DoubleVerify’s revenue. Stifel lowered its price target to $15, citing mixed results, while maintaining a Buy rating. Truist Securities also adjusted its price target to $17, noting softness in the retail vertical but keeping a Buy rating. Canaccord Genuity reduced its target to $18, acknowledging volatile market conditions and mixed results. Additionally, Needham decreased its price target to $12, pointing to margin concerns despite recognizing the launch of six new AI and CTV products. These developments reflect a cautious optimism among analysts, as they continue to recommend a Buy rating despite the revised targets.
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