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S&P 500   5,096.27
DOW   38,996.39
QQQ   439.00
Pure Storage, Hormel Foods rise; WW International, First Advantage fall, Thursday, 2/29/2024
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Thursday, 2/29/2024
Average long-term US mortgage rises to 6.94% after marking fourth-straight weekly increase
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Best Buy reports lower 4Q sales and profits as shoppers remain cautious
Grads From This Midwestern School Are More Likely to Start a Billion Dollar Company Than Founders Who Went To Stanford, Harvard, or MIT: Study
Critical asset just had biggest fall on record (Ad)
It's Leap Day, and You're Probably Working — Here's How 'February 29' Affects Your Paycheck
From Hometown Hero to Franchise Partner — 3 Celebrities Collaborating With Their Hometown Brands
S&P 500   5,096.27
DOW   38,996.39
QQQ   439.00
Pure Storage, Hormel Foods rise; WW International, First Advantage fall, Thursday, 2/29/2024
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Thursday, 2/29/2024
Average long-term US mortgage rises to 6.94% after marking fourth-straight weekly increase
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Best Buy reports lower 4Q sales and profits as shoppers remain cautious
Grads From This Midwestern School Are More Likely to Start a Billion Dollar Company Than Founders Who Went To Stanford, Harvard, or MIT: Study
Critical asset just had biggest fall on record (Ad)
It's Leap Day, and You're Probably Working — Here's How 'February 29' Affects Your Paycheck
From Hometown Hero to Franchise Partner — 3 Celebrities Collaborating With Their Hometown Brands
S&P 500   5,096.27
DOW   38,996.39
QQQ   439.00
Pure Storage, Hormel Foods rise; WW International, First Advantage fall, Thursday, 2/29/2024
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Thursday, 2/29/2024
Average long-term US mortgage rises to 6.94% after marking fourth-straight weekly increase
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Best Buy reports lower 4Q sales and profits as shoppers remain cautious
Grads From This Midwestern School Are More Likely to Start a Billion Dollar Company Than Founders Who Went To Stanford, Harvard, or MIT: Study
Critical asset just had biggest fall on record (Ad)
It's Leap Day, and You're Probably Working — Here's How 'February 29' Affects Your Paycheck
From Hometown Hero to Franchise Partner — 3 Celebrities Collaborating With Their Hometown Brands

Will DoubleVerify form handle to offer early buy opportunity?

Digital advertising image displayed on computer screen

Key Points

  • DoubleVerify has been forming the right side of a base since late October and may form a handle.
  • Analysts expect triple-digit earnings growth in 2023.
  • Analysts' earnings forecasts for DoubleVerify were recently revised higher. 
  • 5 stocks we like better than DoubleVerify

Digital media analytics specialist DoubleVerify Holdings Inc. NYSE: DV may be approaching an early buy point in a cup-shaped pattern.

The stock has been forming its base since pulling back from a July 31 high, as you can see on the DoubleVerify chart

That chart offers a valuable lesson in stock analysis: DoubleVerify gapped down nearly 15% despite beating net income and revenue views, which you can see using the DoubleVerify earnings data. Investors didn't like the company's plans to acquire AI-driven ad specialist Scibids Technology in a cash-and-stock deal valued at $125 million.

It's not unusual for investors to punish a stock for making an acquisition. In this case, investors appeared to be shocked at the deal price. But since then, they have become convinced of Scibids' contribution to DoubleVerify's future results.

After its most recent earnings report, DoubleVerify began trending higher; the stock rallied 19% in November and another 14% in December. 

DoubleVerify bounced back strong

That's the lesson in chart analysis: Whenever a stock gaps down hard, it's not unusual to think it's down and out for the count. 

But as the DoubleVerify analyst forecasts show, Wall Street has a consensus view of "moderate buy" on the stock, with a price target of $40.82, an upside of 8.03%. 

Analysts expect the company to earn 70 cents a share once 2023 wraps up. That would be an increase of 180% over 2022. That forecast was revised higher recently.

Wall Street expects earnings to grow by another 13% in 2024, another increase in the consensus estimate. 

DoubleVerify updated its earnings forecasts to include the impact of the Scibids acquisition. 

Enterprise software stocks among market leaders

Enterprise software makers have been leaders among technology stocks. AppLovin Corp. NYSE: APP, Atlassian Corp. NASDAQ: TEAM, HubSpot Inc. NYSE: HUBS, Lightspeed Commerce Inc. NYSE: LSPD and C3.ai NYSE: AI are all leaders in the broader industry. 


DoubleVerify provides data analytics for digital advertisers to help measure whether a digital ad is displayed in a fraud-free, brand-suitable environment and is fully viewable in the intended geography. In other words, TV ads are often targeted much more narrowly than in the past; that's where DoubleVerify's services come in.

The company provides measurement services for TikTok and also has partnerships with Alphabet Inc. NASDAQ: GOOGL and Meta Platforms Inc. NASDAQ: META

In the third quarter, the company launched viewability and invalid traffic measurements across YouTube Shorts. It also expanded its TikTok partnership.

Short-form video as growth driver

"Short-form video was a key driver of our third-quarter social revenue growth as existing users of DV social solutions leveraged DV's new short-form video verification tools across global campaigns on Meta Reels, YouTube Shorts and TikTok," CEO Mark Zagorski said in the third-quarter earnings call. 

He added that the company expects social to be an important driver of measurement growth over the near, medium and long term as it expands coverage across formats and geographies.

That fast growth shouldn't be particularly surprising, given that DoubleVerify is a relatively new company, having gone public in April 2021. Companies in their first few years of being publicly traded are often among the market's fastest gainers. Frequently, these new companies hail from the tech sector, which is home to fast-growing stocks with high-demand products and services.

This brings us back to the DoubleVerify chart and a potential early entry. The stock began shaping the right side of its current base in late October, in tandem with the SPDR S&P 500 ETF Trust NYSEARCA: SPY, although with a market capitalization of $6.438 billion, it's too small to be part of the S&P 500. 

Stock may form a handle

The stock is currently positioned to form a handle to the current cup formation, which may offer an early buy opportunity. 

A handle formation is characterized by a gradual, downward-sloping consolidation after an initial run-up. It typically takes place over at least five sessions, occurring when some holders take profits after that recent rally.

While DoubleVerify is not yet forming a handle, watch for that to happen because it could offer an entry point ahead of the previous high of $42.51 from July 31.

→ Critical asset just had biggest fall on record (From Stansberry Research) (Ad)

Should you invest $1,000 in DoubleVerify right now?

Before you consider DoubleVerify, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and DoubleVerify wasn't on the list.

While DoubleVerify currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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MarketBeat's analysts have just released their top five short plays for March 2024. Learn which stocks have the most short interest and how to trade them. Click the link below to see which companies made the list.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
DoubleVerify (DV)
4.3777 of 5 stars
$30.84-21.4%1.17%96.38Moderate Buy$42.11
Alphabet (GOOGL)
3.4112 of 5 stars
$138.46+1.5%N/A23.87Moderate Buy$153.65
HubSpot (HUBS)
4.1628 of 5 stars
$619.28+1.1%N/A-174.44Moderate Buy$631.54
Lightspeed Commerce (LSPD)
2.355 of 5 stars
$14.04+3.2%N/A-10.40Hold$18.87
Meta Platforms (META)
4.0113 of 5 stars
$490.13+1.3%0.41%32.89Moderate Buy$494.53
SPDR S&P 500 ETF Trust (SPY)N/A$507.78+0.3%1.31%N/AN/AN/A
AppLovin (APP)
1.4685 of 5 stars
$59.72+2.9%N/A59.72Moderate Buy$50.04
C3.ai (AI)
3.5823 of 5 stars
$36.98+24.6%N/A-16.08Hold$28.25
Atlassian (TEAM)
3.6387 of 5 stars
$207.42+0.2%N/A-139.21Moderate Buy$225.19
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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