Red Violet stock initiated with Buy rating at Lake Street on data quality edge

Investing.com - Red Violet (NASDAQ:RDVT) received its first analyst coverage Monday from Lake Street Capital Markets, which initiated the identity verification company with a Buy rating and a $60.00 price target. The company, currently valued at $619.5 million, has demonstrated impressive gross profit margins of 82.5% and maintains a strong financial health rating according to InvestingPro data.

Lake Street highlighted Red Violet’s strong growth trajectory since its 2018 spinoff from Cogint, noting that revenue climbed from $30 million in 2019 to $75 million in 2024, representing 25% year-over-year growth. The company also achieved an adjusted EBITDA margin exceeding 31% last year, with current EBITDA reaching $10.36 million. Recent data shows the company maintaining its momentum with a 26.3% revenue growth rate over the last twelve months.

The firm pointed to Red Violet’s cloud-native identity verification services that are integrated into client workflows for real-time risk mitigation across industries, including real estate and debt collection. Lake Street specifically cited the company’s "superior data quality" as a competitive advantage against legacy providers.

Despite recent stock appreciation, Lake Street believes further upside exists based on potential "up-market sales traction and improved revenue retention" for the company, which is also known as IDI within its industry.

Lake Street addressed Red Violet’s relative obscurity among investors, attributing it to the company’s "non-traditional birth and its original lack of scale" before its subsequent rapid growth phase.

In other recent news, Red Violet Inc. reported record financial results for the first quarter of 2025. The company achieved a 26% increase in revenue, reaching $22 million. Additionally, Red Violet posted earnings per share (EPS) of $0.33 per diluted share. These impressive figures highlight the company’s robust performance in the recent quarter. Investors have shown optimism following the earnings release, which reflects positively on the company’s strategic initiatives. No mergers or acquisitions were announced in the recent updates. Analyst opinions and ratings for Red Violet were not mentioned in the latest reports. There were no other significant company news items reported alongside the earnings announcement.

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