If you're watching DoubleVerify Holdings and wondering whether it's time to double down or sit tight, you're not alone. The company's recent share price journey has been anything but dull, with the stock closing at $11.02 and posting a 7-day drop of -2.3%. The past month has been even rougher, sliding -15.3%, while the year-to-date return is a hefty -42.8%. Over the last year, shares are down -35.6%, and those who have held on for three years have weathered a -60.9% decline. That's a wild ride for any investor, raising big questions about what the market is seeing or missing about DoubleVerify's value.
Some of this downside can be linked to broader shifts in the digital advertising sector, as new privacy standards and changing ad budgets send ripple effects through even the best-run ad tech players. The market seems to be repricing risk and recalibrating growth dreams for the whole sector, not just DoubleVerify. But does this mean the company's shares are unfairly punished, or is there real reason for caution?
Diving into the numbers, the company earns a valuation score of 3 out of 6. That means DoubleVerify stacks up as undervalued in about half of the common valuation checks we use. But before you draw conclusions just from a score, let's break down the different ways analysts size up a company like DoubleVerify and why the most popular methods don't always tell the full story. Stay tuned, because by the end of this article, we'll explore a smarter way to evaluate value that could change how you see the stock entirely.
Why DoubleVerify Holdings is lagging behind its peers
Approach 1: DoubleVerify Holdings Discounted Cash Flow (DCF) Analysis
The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by forecasting its future free cash flows and then discounting those cash flows back to today's value. This approach helps investors gauge what the business is truly worth based on its ability to generate cash in the future, rather than just current profits.
For DoubleVerify Holdings, the current Free Cash Flow stands at $145.6 million. Analyst projections suggest that the company's annual free cash flow could rise steadily, reaching approximately $294.2 million in 2029. While analysts supply detailed estimates for the next few years, projections beyond that are calculated using conservative growth assumptions. These long-term forecasts help smooth out the uncertainty that comes with looking so far ahead.
After adding up these projected cash flows and factoring in the time value of money, the DCF analysis arrives at an intrinsic value per share of $51.05. Compared to the latest share price of $11.02, this indicates the stock is trading at a 78.4% discount to its estimated worth.