Investors in DoubleVerify Holdings, Inc. (NYSE:DV) had a good week, as its shares rose 4.3% to close at US$21.12 following the release of its second-quarter results. Revenues of US$156m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.04, missing estimates by 7.3%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on DoubleVerify Holdings after the latest results.
After the latest results, the 18 analysts covering DoubleVerify Holdings are now predicting revenues of US$671.0m in 2024. If met, this would reflect a decent 9.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to descend 13% to US$0.31 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$667.8m and earnings per share (EPS) of US$0.31 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$28.82, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic DoubleVerify Holdings analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$20.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that DoubleVerify Holdings' revenue growth is expected to slow, with the forecast 20% annualised growth rate until the end of 2024 being well below the historical 25% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. Even after the forecast slowdown in growth, it seems obvious that DoubleVerify Holdings is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$28.82, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on DoubleVerify Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for DoubleVerify Holdings going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for DoubleVerify Holdings that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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