DoubleVerify is the IBD Stock of the Day as the specialist in digital advertising verification trades with bullish volume on the right side of a cup base. If DV stock forms a handle, investors could see a lower entry point.
Fourth-quarter earnings for DoubleVerify stock are due March 1. Investors may want to be cautious ahead of the earnings report. One strategy around earnings would use call options.
On the stock market today, DoubleVerify stock dipped 1.8% to 27.34. DV stock has gained 28% in 2023. Shares trade about 13% below a conventional buy point of 32.53.
DoubleVerify could form a handle from the cup base if DV stock stays below last week's high of 28.89. If the handle forms, the buy point would be 28.99. Institutional ownership of DV stock is strong, with heavy mutual fund buying.
DV Stock: Reducing Ad Fraud
New York City-based DoubleVerify provides digital media measurement and data analytics. The company reduces ad fraud by verifying advertising views and engagement by consumers online.
It also promises to ensure placement of ads in safe and suitable environments for brands. Founded in 2017, DoubleVerify competes with companies such as Comscore and Integral Ad Science in the measurement segment.
Analysts expect the company to report December-ended quarter adjusted profit fell 35% to 11 cents amid high investments and acquisitions. Revenue is projected to climb 26% to $132.8 million, analysts say.
"We expect transaction volumes to continue to be the primary growth driver near term, fueled by client wins, international expansion, and channel expansion especially in social, internet TV and retail media," Truist Securities analyst Youssef Squali said in a note to clients.
DoubleVerify launched an initial public offering in April 2021 with shares priced at 27. After forming an IPO base, DV stock spiked to a record high 48.42 in June 2021.
Upside From Netflix Ads?
DoubleVerify has integrated its software across the digital advertising ecosystem, including programmatic platforms, social media channels and digital publishers.
"DV is expanding its solution set onto various social platforms, including TikTok, LinkedIn, Reddit and Twitch, aside from its two largest channels Facebook/Instagram and YouTube," added Squali.
On its fourth-quarter earnings call, meanwhile, management may provide more data on a new partnership with Netflix. Netflix in November launched an ad-supported service, called Basic With Ads.
Meanwhile, DoubleVerify's Relative Strength Rating stands at 83, according to IBD Stock Checkup.
In addition, DoubleVerify stock has an Accumulation/Distribution Rating of B-minus. The rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
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