Viant Technology Inc.

DSP Details

Viant Technology Inc. (NASDAQ: DSP) is a software firm that specializes in advertising. Marketers and advertising agencies use Adelphic, the company's business software platform, to centralize the planning, buying, and measurement of their advertising media across most channels. It makes money by charging a platform fee, which is either a percentage of spending or a fixed monthly membership cost, as well as fees for additional services like data and sophisticated reporting when the platform is used on a self-service basis.

Latest News:

• Appointment of Board Member: DSP announced the appointment of Vivian Yang to its board of directors on December 9, 2021, with effect from December 07, 2021. In addition to being a member of the Audit Committee, Ms. Yang will chair the Nominating and Governance Committee.
• New Software Innovations: DSP announced new software enhancements for its Adelphic advertising software on November 18, 2021, with the goal of improving performance and measurement for advertisers that are dealing with the ongoing deprecation of third-party cookies and device IDs.

Q3FY21 Results:

• Boost in Topline: Due to continued demand for its people-based advertising products and services, the firm recorded a 26.49% increase in revenues to USD 50.86 million in Q3FY21 (ended September 30, 2021) compared to USD 40.21 million in Q3FY20.
• Incurred losses: DSP has incurred losses of USD 12.16 million in Q3FY21 vs. a profit of USD 7.48 million in Q3FY20, due to increase in operating expenses.
• Healthy Balance Sheet: As of September 30, 2021, the company has cash and cash equivalents of USD 242.61 million and total debt of USD 17.50 million.

Key Risks:

• Customer Concentration Risk: DSP's top two customers contributed 13.3% and 13.2% revenue in FY20, respectively. As a result, losing any of these significant customers could have a negative impact on the company's financial success.

Outlook:

• FY21 Estimates: As of November 09, 2021, DSP expects its FY21 revenues to be in the range of USD 212.4-215.4 million, representing a YoY growth of 29-30%. It further anticipates its adjusted EBITDA to be around USD 33.2-34.2 million in FY21.

Valuation Methodology: Price/Sales Per Share Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

DSP Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

DSP's stock price has fallen 77.53% in the past nine months and is currently leaning towards the lower band of its 52-week range of USD 7.95 to USD 69.16. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 54.68. We have valued the stock using the Price/Sales-based relative valuation methodology and arrived at a target price of USD 12.84.

Considering the significant correction in the stock price, recent innovations in platform, strong balance sheet, encouraging outlook, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 10.35, up 8.26% as of December 23, 2021, at 12:56 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.