Veritone (VERI – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Darren Aftahi from Roth MKM remains neutral on the stock and has a $2.00 price target.
Darren Aftahi based his Sell rating for Veritone, Inc. (ticker symbol: VERI) on a number of factors. Primarily, Aftahi noted that Veritone continues to struggle with low single-digit organic growth and liquidity issues. Even though the company’s relationship with Amazon remains uncertain, Amazon’s increased holiday hiring could potentially benefit Veritone’s HR solutions and margins, provided Amazon renews their contract. Aftahi also emphasized that strategic, non-dilutive transactions could aid in unlocking shareholder value or growth, given the stagnant nature of organic revenue growth.
For the third quarter of 2023, Aftahi’s expectations for Veritone include revenue/non-GAAP net income/non-GAAP EPS of $36.5M/($7.4M)/$(0.15), which is a mixed projection compared to consensus estimates. The decline in software growth is anticipated to be balanced by a 10% fall in managed services. Aftahi also projected gross margins to be around 74%, a decrease from approximately 81% a year earlier. The non-GAAP operational expenditure is expected to surge by about 68% year-on-year as cost cuts do not yet fully reflect benefits. Moreover, Aftahi voiced concerns about Veritone’s liquidity position, which could hamper its growth prospects going forward. Despite these challenges, the potential DOJ contract could generate new AI revenue opportunities for Veritone.
Aftahi covers the Technology sector, focusing on stocks such as fuboTV, Riot Platforms, and Direct Digital Holdings. According to TipRanks, Aftahi has an average return of 4.7% and a 32.80% success rate on recommended stocks.
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Veritone (VERI) Company Description:
Veritone, Inc. engages in the provision of artificial intelligence (AI) computing solutions to media and entertainment, government, and legal and compliance industries. It operates through the following segments: Advertising; aiWARE SaaS Solutions; and aiWARE Content Licensing and Media Services. The Advertising segment places advertisements for clients, primarily with radio broadcasters, podcasters and digital media producers. The aiWARE SaaS Solutions segment offers solutions through a combination of its direct sales force and indirect channel partners such as value-added resellers (VARs), distributors, system integrators, managed services providers, and referral partners. The aiWARE Content Licensing and Media Services segment sells and markets activities relating to its digital content licensing services business through its direct sales force. The company was founded by Chad Steelberg and Ryan Steelberg in 2014 and is headquartered in Costa Mesa, CA.
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