DoubleVerify, a player in digital advertising, is getting a boost from Netflix's new ad-supported video streaming service. DV stock has neared an entry point, though investors should be cautious amid volatility in technology companies.
New York City-based DoubleVerify provides digital media measurement and data analytics. The company designs verification technology to help reduce ad fraud. It also promises to ensure placement of ads in safe and suitable environments for brands.
DoubleVerify stock holds an entry point of 30.02 from a flat base. It approached that buy point today, then pulled back a bit along with the Nasdaq composite.
While DV stock has retreated about 14% in 2022, its relative strength line remains strong. DV shares gained 0.8% to close at 28.83 on the stock market today.
The RS line, drawn in blue on every IBD daily stock chart and weekly chart at Investors.com, compares a stock's price performance with the S&P 500. If the line slopes higher, it means the stock is outperforming the S&P 500, a market benchmark. When it moves sideways, it's more or less in line with the S&P 500 and when it's sloping downward, it's underperforming.
DoubleVerify's Relative Strength Rating stands at 92, according to IBD Stock Checkup.
In addition, DoubleVerify stock has an Accumulation/Distribution Rating of B. 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.
DV Stock: Netflix Taps DoubleVerify
Also, DoubleVerify works to combat ad fraud by verifying advertising views and engagement by consumers online. Founded in 2017, DoubleVerify competes with companies such as comScore and Integral Ad Science in the measurement segment.
Netflix last week announced that its ad-supported service — Basic With Ads — will launch Nov. 3 in the U.S. and be available in 12 countries for $6.99 per month. Netflix plans to run 4 to 5 minutes of ads per hour.
Netflix said it had picked both DoubleVerify and IAS to provide independent measurement services for the new ad-supported offering.
The companies will confirm ads are being run in the correct locations and viewed according to industry standards.
"We believe this (Netflix) news supports our bullish view on third-party measurement as new ad-supported publishers continue to see the value and need for independent measurement and verification," RBC Capital analyst Matthew Swanson said in a note to clients.
DoubleVerify Earnings Due Early November
DoubleVerify's third-quarter earnings are due in early November. Analysts estimate earnings of 12 cents a share on revenue of $109.2 million.
In the June quarter, DoubleVerify reported a 6-cent profit versus an 8-cent loss in the year-earlier period. Revenue rose 44% to $109.8 million.
Also, investors may want to be cautious ahead of the earnings report. One strategy around earnings would use call options.
DoubleVerify has integrated its software across the digital advertising ecosystem including programmatic platforms, social media channels, and digital publishers. Also, DoubleVerify works to combat ad fraud by verifying advertising views and engagement by consumers online.
One of its big focus areas is on advertising in social media, which can be a minefield for brands.
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.
But DV stock sank to a low of 17.22 on May 10 as the stock market corrected.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
