On Wednesday, JMP Securities increased the price target for AdTheorent Holding Company Inc (NASDAQ:ADTH) to $4, up from the previous $3, while maintaining a Market Outperform rating on the stock. The decision comes after AdTheorent reported fourth-quarter results for 2023 that surpassed expectations, with revenue exceeding consensus by 6% and EBITDA topping the high end of guidance by approximately $2 million.
AdTheorent's guidance for 2024 indicates a revenue forecast that is 4% higher than consensus. However, the company's EBITDA margin guidance suggests a year-over-year contraction of 310 basis points at the midpoint. Despite a slow start in January, the guidance anticipates an acceleration in performance throughout the year.
The company has identified several growth catalysts for 2024, including the expansion of self-service options, AdTheorent Health, Predictive Audiences, and Connected TV (CTV) offerings. JMP Securities highlighted the value of AdTheorent's machine-learning-based platform, which is designed to score and predict conversions in a privacy-conscious manner. This technology is seen as particularly advantageous as the industry prepares for the deprecation of third-party cookies in the second half of 2024.
With shares currently trading at approximately 5.9 times the estimated EBITDA for 2025, JMP Securities believes that the risk/reward balance is favorable for investors at the current stock levels. The firm reiterated its positive stance on AdTheorent and raised the price target, reflecting confidence in the company's growth prospects and market position.
InvestingPro Insights
Following JMP Securities' optimistic outlook on AdTheorent Holding Company Inc (NASDAQ:ADTH), InvestingPro analysis reveals additional insights into the company's financial health and market valuation. AdTheorent's market capitalization stands at a robust $253.25 million USD. Despite a slight revenue contraction of 3.76% in the last twelve months as of Q3 2023, the company has shown a remarkable quarterly revenue growth of 8.8% in Q3 2023, indicating potential recovery and growth momentum.
Investors should note that AdTheorent is trading at a high earnings multiple, with a P/E ratio of 40 and an adjusted P/E ratio for the last twelve months as of Q3 2023 at 57.27. This suggests that the market has high expectations for the company's future earnings growth. Moreover, AdTheorent holds more cash than debt on its balance sheet, which is a positive sign for financial stability and operational flexibility.
As for performance, AdTheorent has delivered a strong return over the last three months, with a price total return of 117.42%. This trend is also reflected over the last six months, with an impressive return of 131.45%. These metrics underscore the company's recent market performance and could be a signal for investors looking for growth stocks.
For those interested in further analysis, InvestingPro provides additional InvestingPro Tips for AdTheorent, including insights into profitability, valuation multiples, and analysts' predictions. To explore these tips and make more informed investment decisions, visit https://www.investing.com/pro/ADTH. Remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Currently, there are 11 more InvestingPro Tips listed in InvestingPro for AdTheorent, offering a comprehensive analysis of the company's financial and market performance.
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