Direct Digital Holdings: Positioned for Recovery and Growth with Strategic Cost Management and Promising Outlook

Benchmark Co. analyst Daniel Kurnos maintained a Buy rating on Direct Digital Holdings (DRCT – Research Report) today and set a price target of $6.00.

Daniel Kurnos has given his Buy rating due to a combination of factors that suggest Direct Digital Holdings is poised for recovery and growth. Despite facing challenges from past accusations, the company has shown resilience with a promising start in the first quarter, aligning with expectations in terms of revenue and EBITDA. The anticipation of significant developments in the latter half of the year, such as the integration of direct DSPs, positions DRCT as a potential outperformer.
Moreover, the management’s strategic cost evaluations and efforts to trim expenses by at least 20% from the previous year indicate a strong focus on operational efficiency. This cost management, coupled with the potential for a return to growth, is expected to bring scale benefits and improve EBITDA by 2025, with further acceleration anticipated in 2026. The reaffirmation of guidance amidst macroeconomic uncertainties further bolsters confidence in the company’s outlook.