DoubleVerify's AdTech Productivity on the Rise, Analyst Forecasts Upside Potential

Needham analyst Laura Martin reiterates a Buy rating on DoubleVerify Holdings, Inc. DV with a price target of $35.
The analyst notes that DoubleVerify has the "best productivity slope" in the AdTech business, mainly in the past five quarters. So long as the company continues this upward productivity trajectory in FY23, its share price will rise.
DoubleVerify's strength in the AdTech business is mainly driven by adding new clients. The company has retained its largest 75 clients during the past three years.
In 1Q, stable margins and revenue growth of more than 20% will continue to underscore the company's strong "tactical position" in AdTech.
The company will also benefit from introducing social verification products for Meta Platforms, Inc META and TikTok advertisements, widening its total addressable market.
The analyst maintains estimates for 1Q and FY23 but fine-tunes revenue allocation between Measurement and Activation in 4Q.
There will be a growing need to verify the company's Connected TV, or CTV advertisement impressions, which could add a total addressable market of up to $800 million and boost yearly revenue. Currently, DoubleVerify's CTV has a total addressable market of $70 billion.
Price Action: DV shares closed at $30.93 on Tuesday.