AdTheorent Holding Company, Inc (NASDAQ:ADTH): A great bargain at current price

AdTheorent Holding Company, Inc. (NASDAQ: ADTH) is an advertising technology company based in the United States. The company focuses on providing data-driven solutions for digital advertising campaigns. It utilizes predictive technology and machine learning algorithms to target audiences effectively and optimize ad delivery across various digital channels.

AdTheorent’s platform aims to enhance the performance of digital advertising by using advanced data analytics to identify potential customers and deliver relevant ads to them. The company claims to offer precise targeting, increased engagement, and better return on ad spend for advertisers.

It is a digital media platform that focuses on performance-first, privacy-forward methods to execute programmatic digital advertising campaigns, serving both advertising agency and brand customers. Geographically it serves Canada, the United Kingdom, and Others. Key revenue is earned from the United States.

Highlights and News Updates

• On July 14^th, 2023, AdTheorent participated in a fireside chat with Water Tower Research.

• On June 21^st, 2023, AdTheorent’s Algorithm-Based audience product earned Neutronian’s NQI certification for data quality, privacy, and transparency.

• On February 23^rd, 2023, AdTheorent joined JMP Securities Technology Conference.

• On January 26^th, 2023, AdTheorent announced the appointment of Patrick Elliott as Chief Financial Officer.

• On January 18^th, 2023, AdTheorent launched Industry’s First Privacy-Forward solution for audiences.

• On January 17^th, 2023, AdTheorent announced that it has been selected by Business Intelligence Group as a winner of the 2023 BIG Innovations Awards for its technology innovation.

Key Data

First Quarter 2023 Highlights

• Revenue stood at US $32.7 million, a 4.6% decrease compared to US $34.2 million in the first quarter of 2022.

• Gross profit stood at US $14.3 million, down 13.2%, from US $16.5 million in the first quarter of 2022. Gross Profit Margin was 43.7%, compared to 48.1% in the first quarter of 2022.

• Adjusted Gross Profit decreased by US $2.1 million, or 9.1%, to US $20.9 million. Adjusted Gross Profit Margin was 64.0% compared to 67.1% in the first quarter of 2022.

• Connected TV revenue increased 17% for the first quarter compared to the same period last year, driven by continued demand and new partnerships. 

Financials

The revenue of the company is quite stable, and the company  has managed to increase their earnings too. They got high earnings in FY2021, and in FY2022 due to some additional earnings.

The company has managed to pay off its debt, the company has zero long-term debt. The company has assets worth US $190.60 Million including cash of US $72.57 Million, it also has retained earnings of US $71.85 Million.

The quarterly revenue of the company is quite stable however they booked a loss in Q1’2023, due to low revenue earnings.

Currently, the EPS of the company is at US $0.32 which is down by 17.95% compared to the last year’s EPS.

Forecast

Currently, the company is trading at US $1.49 with a 1-year projected target of around US $1.92 and a low estimation will be US $1.10; the average price target will be US $1.80.

Technical Analysis

• The price action analysis of the stock is indicating a positive uptrend in the stock.

• Right now, RSI (53.04) indicator is above 50 which shows it is a good time to invest in this stock.

• The stock has the potential to bounce back up to 28% from the current market price.

Indicators Summary – Buy

• Market sentiments are bullish, and stock can go up further.

• MACD (-0.01) indicator is giving a bullish signal.

• 50-EMA moving average is giving us a buy signal.

Risk factors

• The company is prone to market changes and conditions. In Q1’23 the revenue of the company declined by 36.90% compared to Q4’22.

• The industry in which the company operates is highly competitive in nature. There are numerous players in the market such as Google Adv, Facebook, TTGT, and many more.

• Technology is also a factor. In a rapidly evolving world, the company may face challenges in adapting to new technologies or disruptions in its sector.

• Since last year the stock price has fallen more than 86%,

Stock Recommendation

The company’s stock is trading at a cheap price as compared to its financials, which is a big positive. And on top of that, the company is also debt free which is good  as they can divert the earning in research and development this will impact the company positively in future.

The advertising industry is also in a booming phase as more and mofe companies are looking for affordable options to advertise their products to the target audience. ADTH stands in a good position to attract these businesses which will lead to growth in future.

MarketFacts gives a “Buy” rating on the stock at the closing price of US $1.49 as of July 26^th, 2023.

CMP (USD) (July 26, 2023)	US $1.49
Target Price	US $1.95
Recommendation	Buy