Stocks closed another turbulent week on Wall Street with mixed results. The Dow finished with a 1.2% gain. Meanwhile, the S&P 500 and the Nasdaq fell 3% and 1.5%, respectively, to extend the previous week’s negative performance and post the seventh negative result out of the past nine weeks.
The average rate on a 30-year fixed-rate mortgage surged to nearly 7% last week, its highest level in over 20 years, according to Freddie Mac. This week we’ll get some clarity on how the housing market is holding up against record-high mortgage rates with the release of September’s housing starts, building permits, and existing home sales. Mortgage rates have more than doubled since the beginning of the year, when the average 30-year mortgage stood at 3.11%
Investors are also preparing themselves for one of the busiest weeks of Corporate earnings season with financial earnings due from big banks Charles Schwab, Bank of America, Goldman Sachs, and Barclays. We’ll also get quarterly results from Johnson & Johnson, Lockheed Martin, IBM, Netflix, United Airlines, American Airlines, Procter & Gamble, and Tesla, among others. Expectations are generally low this season. We’ll see how results from these companies stack up in the coming days.
To make an impact, ads must be seen, by a real person, in the intended geography, in a brand-safe environment. Challenges like the latest fraud schemes have led to increasingly stringent ad criteria and heightened risk to a company’s brand reputation. Our first recommendation is an industry leader in digital advertising solutions that’s gaining attention on Wall Street.
Advertisers seeking stability and clarity in an increasingly unstable and opaque marketing environment are turning to DoubleVerify (DV) for its industry-leading quality and performance solutions. DV’s products automatically analyze the effectiveness of digital ads. Among the metrics evaluated by the software are “brand safety, viewability, and geography,” along with “exposure and engagement” potential, giving customers clarity and confidence in their digital investments, ultimately driving better outcomes and ROI.
The company’s impressive customer base includes Meta (META), Amazon’s (AMZN) Twitch Ads, and Microsoft (MSFT). There have also been recent rumblings on Wall Street that Double Verify has partnered up with Netflix (NFLX) for its upcoming ad offering.
Total advertiser revenue grew by 43% YOY in the second quarter to $110 million. It generated a net income of $10.3 million primarily due to a 24% increase in Media Transactions Measured and a 10% increase in Measured Transaction Fees. The Gross Revenue Retention rate was over 95%. “We delivered an outstanding second quarter and surpassed our expectations for growth and profitability fueled by record Activation revenue and continued momentum on Social and CTV platforms,” said CEO Mark Zagorski.
DoubleVerify anticipates third-quarter revenue of $108 to $110 million, representing a year-over-year increase of 31%, and Adjusted EBITDA in the range of $32 to $34 million, representing a 30% margin. Full Year 2022 Revenue expectations of $448 to $450 million represent a year-over-year increase of 35%. We’ll find out if the company has sustained its impressive growth momentum during its November 11th earnings call.
Biogen is a biopharmaceutical company focused on therapies for neurological and neurodegenerative diseases. The company is on the leading edge of creating drugs and therapeutics for some of the more perplexing chronic diseases like Alzheimer’s. Biogen has been working on drugs that can reduce the buildup of amyloid plaques which could be critical to stemming the advancement of the disease.
The neurological solutions pioneer has partnered with Eisai, a Japanese pharmaceutical company, to develop Lecanemab, one of its potential amyloid plaque-destroying drug candidates. The two companies will split the drug’s profits 50/50. Recent data from lecanemab has proven “robust” as the drug saw a 27% reduction in patients’ clinical decline on cognitive and functional metrics, causing the entire industry to rethink the historically elusive answer to Alzheimer’s.
Following the “better than expected” Phase 3 data for lecanemab, JPMorgan analyst Chris Schott raised the firm’s price target on Biogen to $275 from $221. The analyst foresees full FDA approval for lecanemab and believes there is a high probability that Medicaid Services will cover the drug. Schott would not be surprised to see further upside for the shares into year-end as he expects lecanemab to dominate the competition.
While lecanemab takes center stage, Biogen has a pipeline that features several drugs in various clinical stages. The company’s Spinraza for treating spinal muscular atrophy has been a blockbuster drug. Multiple sclerosis drugs Avonex and Plegridy generate nearly $2 billion in annual sales.
BIIB shares spiked on the positive lecanemab results and have dwindled since. A better entry opportunity may come, but for long-term-minded investors focusing on growth, Biogen is an intriguing candidate even at its current level.
Given the unprecedented situation with major world powers Russia and China, Washington is taking steps to strengthen the technical capabilities of its military and that of its allies while also seeking to protect the U.S. from cyber threats.
Booz Allen Hamilton (BAH) is one of the world’s largest cybersecurity solutions providers. Specializing in marketing cybersecurity products that are produced by other companies, nearly every U.S. federal, intelligence and defense agency uses its services. In other words, Booz Allen is poised to scoop up a significant portion of the whopping 15.6 billion that the U.S. is expected to spend on cybersecurity in 2023.
For its fiscal 2023 first quarter, which ended June 30, revenue surged 13% year over year to $2.25 billion, while its net income jumped an impressive 50% to $138.1 million. Wall Street expects $4.88 EPS for the entire year, indicating a reasonable forward P/E of 19.4 times.
Stifel analyst Bert Subin recently raised the firm’s price target on BAH to $105 from $102 after hosting the company at the firm’s London Industrials & Renewables Summit and coming away with a favorable outlook, driven by continued demand tailwinds and an easing labor market.
The current consensus recommendation is to Buy Booz Allen. A median price target of $105 represents an increase of 10% from the current price.
