Red Violet (NASDAQ:RDVT) Issues Earnings Results

Key Points

• Red Violet reported quarterly EPS of $0.37, missing the consensus estimate of $0.41 by $0.04.
• Despite the earnings miss, third-quarter revenue reached a record $27.8 million, up 20% year over year; adjusted EBITDA rose 22% to $11 million, and operating cash flow hit a record $12.7 million.
• Growth was broad across customer groups, but IDI’s real estate business fell at a high-single-digit rate, with management expecting continued softness until housing conditions improve.

Red Violet (NASDAQ:RDVT - Get Free Report) released its quarterly earnings results on Wednesday. The company reported $0.37 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.41 by ($0.04), Zacks reports. Red Violet had a return on equity of 16.12% and a net margin of 16.54%.

Here are the key takeaways from Red Violet's conference call:

• Red Violet reported record third-quarter revenue of $27.8 million, up 20%, and adjusted EBITDA of $11 million, up 22%, with a 40% margin. Operating cash flow also reached a record $12.7 million, and trailing 12-month revenue exceeded $100 million.
• Growth was broad across customer groups and industries, with 383 new IDI billable customers and continued strength in financial services, background screening, law enforcement, and collections. Contractual revenue rose to 78% of the total, while gross revenue retention held at 96%.
• IDI’s real estate business declined at a high-single-digit rate year over year, and management expects softness to persist until housing market conditions improve. FOREWARN’s growth partly offset the weakness, with double-digit revenue growth and nearly 20,000 users added.
• The company plans to keep investing in its platform, AI, product development, and sales capacity while pursuing strategic acquisitions. It ended the quarter with $165.7 million in cash and U.S. Treasury investments and no debt, following an offering that generated about $109 million in net proceeds.

Red Violet Trading Up 0.5%

Shares of Red Violet stock traded up $0.42 on Wednesday, reaching $80.00. The stock had a trading volume of 219,707 shares, compared to its average volume of 170,174. The business's 50 day moving average is $76.95 and its two-hundred day moving average is $57.37. The company has a market cap of $1.28 billion, a P/E ratio of 71.43 and a beta of 1.73. Red Violet has a 1 year low of $33.40 and a 1 year high of $83.15.

Insider Transactions at Red Violet

In other news, Director William Livek acquired 2,000 shares of the business's stock in a transaction dated Thursday, August 27th. The stock was purchased at an average cost of $71.49 per share, for a total transaction of $142,980.00. Following the acquisition, the director owned 22,733 shares of the company's stock, valued at $1,625,182.17. This trade represents a 9.65% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. 8.90% of the stock is currently owned by company insiders.

Analyst Upgrades and Downgrades

A number of brokerages have weighed in on RDVT. Raymond James Financial assumed coverage on Red Violet in a report on Thursday, September 17th. They set an "outperform" rating and a $90.00 price target for the company. Weiss Ratings raised Red Violet from a "buy (b-)" rating to a "buy (b)" rating in a research report on Tuesday, October 13th. Wall Street Zen upgraded Red Violet from a "hold" rating to a "buy" rating in a report on Saturday, October 10th. B. Riley Financial lifted their price objective on shares of Red Violet from $65.00 to $81.00 and gave the company a "buy" rating in a research note on Thursday, July 30th. Finally, Needham & Company LLC started coverage on Red Violet in a research note on Tuesday, September 1st. They set a "buy" rating and a $90.00 price target on the stock. Five research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company. According to data from MarketBeat.com, Red Violet has an average rating of "Moderate Buy" and a consensus price target of $83.50.

Red Violet Company Profile

Red Violet, Inc NASDAQ: RDVT is a technology company that develops cloud-based identity intelligence and information solutions. Its platform helps organizations access, analyze and connect data to support investigations, risk management, fraud prevention, compliance and other decision-making activities.

The company's products include idiCORE, an investigative and information services platform designed for users such as law enforcement agencies, government organizations, corporate security teams, insurance companies, financial institutions, collection agencies and other businesses.

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