Analyst Joshua Reilly of Needham maintained a Buy rating on Digimarc, with a price target of $10.00.
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Joshua Reilly has given his Buy rating due to a combination of factors tied to Digimarc’s evolving business mix and execution outlook. While recent quarterly results showed a dip in recurring revenue after the loss of two legacy contracts, he highlights that the company has already secured $500K of annualized revenue from its new gift card initiative in Q4 and is actively negotiating with eight additional retailers for expansion by the second half of 2026.
Reilly also emphasizes that recent cost reductions should allow Digimarc to operate more efficiently while pursuing this targeted growth opportunity, with projected cash burn improving from roughly $13 million to about $4 million in 2026. Although he trims his price target to $10 from $20 to reflect broader software valuation pressure, he expects the company’s more concentrated strategy and improved cash profile to support better investor sentiment and justify a Buy rating over the medium term.