Ad-techs DoubleVerify, IAS, Trade Desk gain as Baird opens bullish coverage
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Core advertising technology companies are higher Friday afternoon after Baird launched bullish coverage on three names.
DoubleVerify (NYSE:DV) rose 3.1%, Integral Ad Science (NASDAQ:IAS) gained 2.1%, and The Trade Desk (NASDAQ:TTD) rose 1.6% following the firm's initiation of all three at Outperform.
"In summary, we think these businesses are well aligned with ongoing trends in the advertising industry, and we expect each name to benefit from high-quality product offerings, robust profitability profiles, and other company-level drivers," analyst Vikram Kesavabhotla said.
The companies offer key functions that will continue be important in the ad ecosystem, the firm noted: DoubleVerify (DV) and IAS (IAS) offer analytics solutions to validate the quality of ad impressions, while The Trade Desk (TTD) offers its self-service purchasing platform to help optimize digital ad spend.
Meanwhile "all three companies share a few common characteristics that contribute to attractive investment cases: proven technology, strong competitive positions, significant profitability, great track records of execution, and exposure to key themes across the advertising industry over the coming years - such as the continued growth of CTV and the emergence of retail media networks," Kesavabhotla said.
They're available at attractive entry points at current levels, Kesavabhotla said, and each has its own positive drivers. DoubleVerify (DV) should benefit from "(1) integration of the Scibids acquisition, which should offer a variety of strategic benefits to enhance the platform, and (2) progress on cross-selling existing customers and expanding into International markets."
IAS should see tailwinds including "(1) a significant number of recently announced partnerships and product expansions that should ramp in 2H23/F24, and (2) potential for outsized multiple expansion given the meaningfully discounted valuation."
And The Trade Desk (TTD) will also benefit from "(1) recent innovation around Kokai and ongoing progress with OpenPath, which should help enhance the value of the platform, and (2) progress on expanding into International regions, which represent a much higher portion of industry spend compared to TTD's current business mix."
A price target of $38 on DV implies 15% upside ; a target of $19 on IAS suggests 34% upside; and a target of $88 on TTD implies 22% upside.
A few other ad-techs are higher Friday -- Criteo (CRTO) +1.6% and PubMatic (PUBM) +1.2% -- while others are flagging: Magnite (MGNI) -1.5%; Innovid (CTV) -2.6%.

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Compare metrics for DV to IAS, TTD