Roth MKM analyst Darren Aftahi maintained a Buy rating on Direct Digital Holdings (DRCT – Research Report) today and set a price target of $27.50.
Darren Aftahi has given his Buy rating due to a combination of factors that indicate Direct Digital Holdings (DRCT) is poised for significant growth. Aftahi’s optimism is rooted in the company’s potential for over 30% growth in 2024, which is expected to be driven by a strategic move towards more direct client deals, likely enhancing profitability. The company’s recent establishment of new partnerships is anticipated to extend its Supply-Side Platform (SSP) reach into Connected TV (CTV) and widen audience reach. Furthermore, the completion of a fully operational technology platform is projected to increase DRCT’s market share, wallet share, and cash flow. An anticipated positive impact from these initiatives in the fourth quarter could suggest an upside to the forecasts for both the quarter and the full year of 2024, justifying the raised price target to $27.50.
Aftahi also notes the company’s existing performance, highlighting DRCT’s exceptional growth and the presence of catalysts that support continued rapid growth and margin expansion into 2024. Despite operating with a small fraction of filled impressions, there is substantial room for growth in the fill rate alone. The partnership with Amazon Publisher Services and the integration set for fiscal year 2024 are expected to bolster DRCT’s advertising base, reach, auction capabilities, and scalability. This strategic direction aims to capture more market and wallet share, leading to improved cash flow. The positive market trends observed in CTV, as evidenced by the success of industry peers like Magnite, further support the case for DRCT’s favorable outlook and underpin Aftahi’s Buy rating.
In another report released on March 6, Benchmark Co. also maintained a Buy rating on the stock with a $30.00 price target.
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Direct Digital Holdings (DRCT) Company Description:
Direct Digital Holdings Inc is an end-to-end, full-service programmatic advertising platform primarily focused on providing advertising technology, data-driven campaign optimization and other solutions to underserved and less efficient markets on both the buy- and sell-side of the digital advertising ecosystem.
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