Digital Media Solutions is a strong-buy. What about ViaSat?
Digital Media Solutions is an ad tech company. It connects online advertisers with customers through marketplace solutions and performance-based branding. DMS has a powerful consumer intelligence database. The company uses it to fine-tune customer acquisition campaigns and at the same time, offers advertisers accountability for the project budget.
In July of this year, DMS went public via a merger with Leo Holdings – a special purpose acquisition company. The combination took the stock’s name for the ticker, along with initiating trading at $10 per share. Digital Media Solutions has been volatile since. It is currently lower by 27% since it started trading.
However, Digital advertising is a huge sector, which is still growing. It was worth $100 billion in 2019 and analysts expect it to reach $130 billion by the end of next year. Digital Media Solutions has a solid piece of that cash cow, with the Q3 numbers clearly demonstrating that.
Quarterly revenue skyrocketed to a company record, of $82.8 million, which was higher by 10% sequentially and 44% year-over-year. Furthermore, the company reported a gross profit of $25.1 million in total revenue. Overall, the stock’s first quarter as a publicly-traded company showed strong results.
Canaccord’s analyst Maria Ripps thinks that DMS has great potential and now is an excellent time to buy it before the shares skyrocket again. She set her price target at $15, suggesting a 106% gain over the year.
What do the analysts think about ViaSat?
ViaSat works in digital networking. The company provides people with high-speed broadband access, using a secure satellite network system. ViaSat serves both commercial and military markets, meeting the growing need for secure communications links.
However, the anti-coronavirus lockdown policies hit ViaSat particularly hard. Even though online networking has been busier than ever during the pandemic, a large segment of ViaSat’s business comes from the airlines. With air travel facing depressed travel volumes, ViaSat’s shares are still struggling.
Despite that, ViaSat reported $577 million in the third quarter’s contract awards, thus representing a 29% YoY gain. The company has seen awards totalling $1.9 billion since January 2020, which is higher by 5% from this time last year.
JPMorgan analyst Philip Cusick thinks that ViaSat is a satellite innovation leader. He believes the company’s future ViaSat-3 fleet will accelerate growth in satellite services in the near future.
Cusick rated VSAT shares as a Buy. He set his price target at $60, which implies a 72% gain on the one-year time horizon.
