Digimarc (DMRC – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Joshua Reilly from Needham maintained a Buy rating on the stock and has a $30.00 price target.
Joshua Reilly has given his Buy rating due to a combination of factors that suggest potential positive outcomes for Digimarc. Despite reporting fourth-quarter results that fell slightly short of expectations, the company has announced significant cost-cutting measures, including a 25% reduction in operating expenses. This strategic move is anticipated to drive positive free cash flow by the fourth quarter of 2025.
Moreover, Digimarc is undergoing a strategic review with the possibility of going private, which could unlock further value. The company is also shifting its focus towards Authentication use cases, which is expected to enhance cost savings and drive growth in annual recurring revenue. Although negotiations with Walmart are ongoing, Digimarc is actively pursuing other growth avenues such as gift cards and anti-counterfeit solutions, which are promising near-term revenue drivers. Consequently, these strategic adjustments and growth prospects underpin Reilly’s Buy rating.