Shares of Direct Digital Holdings soared on Monday following the release of its impressive third-quarter earnings report. The stock jumped 28% to $5.14, building on its 55% increase during Friday’s trading session. Over the past year, the stock has surged by a remarkable 45%.
Direct Digital’s earnings for the quarter reached $3.4 million, or 23 cents per share, a significant improvement from the $811,000, or 6 cents per share, reported during the same period last year. This surpasses the expectations of analysts polled by FactSet, who predicted earnings of $800,000, or 5 cents per share.
The company’s revenue for the quarter amounted to $59.5 million, exceeding both last year’s $26 million and the projected figure of $34.5 million. These robust financial results demonstrate the early benefits resulting from Direct Digital’s investments in its technology stack, advertising platform, and operational structure. Originally slated to impact the company in 2024, these investments have already begun to pay off.
Buoyed by its strong performance, Direct Digital has raised its revenue guidance for fiscal 2023, now anticipating a range of $170 million to $190 million compared to the previous projection of $125 million to $130 million. Analysts are now predicting fiscal 2023 revenue of $163 million.
In light of these positive developments, Benchmark has increased its price target for Direct Digital stock to $15 from $12 per share while maintaining its Buy rating.
Direct Digital Holdings’ impressive Q3 earnings and overall growth trajectory have clearly captivated investors, making it an exciting prospect in the market.