DoubleVerify an attractive opportunity, risk/reward profile favorable for long-term investors – William Blair

By Sam Boughedda

William Blair analysts believeDoubleVerify Holdings Inc (NYSE:) has “massive TAMS ahead,” and the multiple growth drivers for the company “underscore an attractive opportunity” for the company in 2023 and beyond.

The analysts, who have an Outperform rating on the stock, explained that the firm thinks DoubleVerify has “meaningfully grown its total addressable market (TAM) over the past 12 to 18 months” as the company has expanded its platform and unlocked new revenue opportunities in large connected TV providers and social networks.

“In CTV, the company was named as one of two third-party verification providers of recent ad-supported tier launch. And while nothing has been announced yet, we believe DV is in a solid position to be integrated into  launch of its ad-supported tier for Disney+ as well,” the analysts wrote.

“In social, DV is one of three companies chosen to bring brand safety and suitability measurement to Feed (for both Facebook and Instagram). It similarly expanded with Twitter into its Timeline and added brand suitability capabilities to TikTok.”

The analysts estimate that the partnerships collectively represent an incremental revenue opportunity of about $1 billion for DV over the next several years and should enhance its growth durability.

“Further, we do not believe any meaningful contribution from these new opportunities is baked into consensus estimates at this time (and we have not accounted for it in our model), thus providing upside potential to estimates as these partnerships ramp up,” they added. “With the stock trading at 25 times our 2024 EBITDA estimate, we believe the risk/reward profile is favorable for long-term investors.”