One of the tech stocks more deeply in the red over the past few trading days was advertising technology specialist DoubleVerify Holdings(NYSE: DV). That's because it missed the average analyst estimate for profitability, reduced its guidance, and was socked with several price target cuts from prognosticators.
Those factors were too great to overcome. According to data compiled by S&P Global Market Intelligence, DoubleVerify's share price plunged by almost 38% over the course of the trading week as a result.
Full-year revenue guidance was cut and missed estimates
DoubleVerify did manage to post 15% year-over-year revenue growth in its first quarter and beat the consensus prognosticator estimate for that line item. The dynamic on the bottom line wasn't great, however, with the company reporting a decline in net income and delivering a whiff on the average prognosticator forecast.
More uncomfortably for the ever-forward-looking stock market, DoubleVerify reduced its full-year revenue guidance. It's now expecting to earn $663 million to $675 million. At the midpoint of that range this would mean encouraging 17% year-over-year growth, but the collective analyst estimate is $696 million.
The company's guidance for its current (second) quarter is also comparatively weak, as the forecast for $152 million to $156 million doesn't quite reach the pundit consensus of $159 million.
Price target cuts and a severe downgrade
Not surprisingly, several analysts got more bearish on DoubleVerify's prospects. The most extreme reaction came from Bank of America Securities' Omar Dessouky, who double-downgraded his recommendation on the stock from buy to underperform (sell, in other words). He also drastically reduced his price target to $18 per share from his previous $45.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and DoubleVerify. The Motley Fool has a disclosure policy.
