Red Violet (RDVT) AI Stock Analysis

• Market Cap: $613.08M
• Dividend Yield: N/A
• Average Volume (3M): 119.87K
• Price to Earnings (P/E): 60.8
• Beta (1Y): 1.02
• Revenue Growth: 22.27%
• EPS Growth: 117.93%
• Country: US
• Employees: 215
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.21
• Shares Outstanding: 14,109,914
• 10 Day Avg. Volume: 102,687
• 30 Day Avg. Volume: 119,869
• PEG Ratio: 0.72
• Price to Book (P/B): 7.92
• Price to Sales (P/S): 8.86
• P/FCF Ratio: 27.77
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 6.27
• Enterprise Value/Gross Profit: 7.49
• Enterprise Value/Ebitda: 23.78
• 1Y Price Target: $62.00
• Price Target Upside: 42.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 1.28
• Revenue Forecast (FY): $101.55M

• Rating: 73 Outperform
• Price Target: $51.00 ▲(17.38% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is driven primarily by strong financial performance (high margins, low leverage, and improving cash generation) and a constructive earnings update showing continued growth and profitability gains. These positives are tempered by a weaker technical trend (below key longer-term moving averages with negative MACD) and a high valuation (P/E ~60.8) that leaves less room for execution missteps.

Positive Factors

Conservative Balance Sheet

Very low leverage and steadily growing equity (from $43.3M in 2020 to $100.9M in 2025) provide durable financial flexibility for product investment, buybacks, or downturns. A strong capital base reduces refinancing and solvency risk, supporting multi‑year execution of strategy.

Robust Cash Generation

Consistent and growing operating and free cash flow (FCF ~ $28.8M in 2025) underpins self-funded R&D and go‑to‑market investments while enabling buybacks. Persistent cash conversion strengthens earnings quality and supports sustainable capital allocation over the next several years.

Proprietary Platform & AI Investment

A proprietary entity resolution framework and targeted AI investments create structural differentiation in identity intelligence. Cloud-native architecture aids scalability and sticky integrations, increasing switching costs and enabling higher-margin, platform-based recurring revenue.

Negative Factors

Vertical Exposure: Real Estate

Exposure to the real estate vertical leaves revenue sensitive to housing affordability and interest-rate driven activity. Persistent weakness in that vertical can pressure growth and necessitate further diversification or deeper penetration in non‑housing use cases to sustain long‑term revenue.

Slight Retention Weakening

A decline in gross retention, even modest, signals potential softening in renewal dynamics or increased churn risk as larger customers negotiate terms. Over time, lower retention raises required new‑sales intensity and can slow durable ARR expansion if not addressed.

Historical Earnings & FCF Variability

Although recent years show stronger cash conversion, past volatility in free cash flow relative to earnings reflects working-capital and investment swings. This variability increases forecasting risk and could amplify stress if growth slows or if investments temporarily compress margins.

Red Violet Business Overview & Revenue Model

Company Description

Red Violet, Inc., a software and services company, specializes in proprietary technologies and applying analytical capabilities to deliver identity intelligence in the United States. It offers idiCORE, an investigative solution used to address various organizational challenges, which include due diligence, risk mitigation, identity authentication, and regulatory compliance; and FOREWARN, an app-based solution that provides instant knowledge before face-to-face engagement with a consumer, as well as helps professionals to identify and mitigate risk. The company serves financial services, insurance, healthcare, retail, and telecommunication companies; law enforcement and government agencies; and collections, corporate security, and investigative firms, as well as solutions used for purposes, such as risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition. It markets its products and services through value-added distributors, resellers, and strategic partners; and trade shows and seminars, advertising, public relations, distribution of sales literature, and product specifications and ongoing communication with prospective customers, distributors, resellers, strategic partners, and installed base of current customers, as well as through direct sales. Red Violet, Inc. was incorporated in 2017 and is headquartered in Boca Raton, Florida.

How the Company Makes Money

Red Violet generates revenue through a subscription-based model, charging clients for access to its data analytics platform and services. Key revenue streams include fees for identity verification services, background checks, and ongoing data analytics support. The company also benefits from strategic partnerships with financial institutions and other industry players, which can enhance its service offerings and expand its client base. Additionally, Red Violet may derive income from one-time service fees for custom data solutions or consulting services tailored to specific client needs.

Red Violet Financial Statement Overview

Summary

Strong overall fundamentals supported by solid multi-year revenue growth, high and improving margins, very low leverage, and notably stronger operating/free-cash-flow generation in the last two years. Main offsets are earlier-period profitability volatility and some historical variability in free-cash-flow conversion.

Income Statement

Revenue has scaled meaningfully from $34.6M (2020) to $90.3M (2025), with 2025 showing a re-acceleration in growth (4.4 vs. ~0.25 in 2024). Profitability also improved: net margin rose to ~14.6% in 2025 from ~9.3% in 2024, and EBITDA margin expanded to ~28.0% (from ~23.3%). Strength is strong gross margin consistently above ~75% since 2021 and improving operating leverage. Key weakness is historical earnings volatility (losses in 2020 and negative EBIT in 2020–2021) and an unusually high 2023 net margin (~22.5%) versus modest EBIT margin (~4.2%), suggesting profits have been less consistent than top-line growth at times.

Balance Sheet

The balance sheet is conservatively financed with very low leverage: debt-to-equity remains ~0.02–0.03 in recent years (2025 ~0.028). Equity has grown steadily ($43.3M in 2020 to $100.9M in 2025) alongside asset growth ($52.0M to $112.0M), indicating a strengthening capital base. Returns on equity improved versus early years, reaching ~13.0% in 2025 (up from ~8.1% in 2024), though it was stronger in 2023 (~15.7%) and weak/negative in 2020–2022, highlighting some variability in efficiency despite the strong balance sheet.

Cash Flow

Cash generation is a clear positive. Operating cash flow increased to $29.3M in 2025 (from $24.0M in 2024 and $15.1M in 2023), and free cash flow was strong at $28.8M in 2025 with robust growth (~20.3). Free cash flow closely matched net income in 2024–2025 (~0.99 and ~0.98), supporting earnings quality, and cash flow relative to reported profits is healthy (coverage ~3.73 in 2025 vs ~2.32 in 2024). The main weakness is historical variability in free cash flow conversion (notably 2023 free cash flow to net income ~0.39 and lower levels in 2021–2022), indicating occasional working-capital or investment swings.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	90.25M	75.19M	60.20M	53.32M	44.02M
Gross Profit	75.58M	61.19M	47.13M	41.11M	32.83M
EBITDA	23.81M	17.48M	10.86M	7.04M	4.08M
Net Income	13.15M	7.00M	13.53M	616.00K	655.00K
Balance Sheet
Total Assets	112.01M	98.53M	92.99M	77.41M	74.38M
Cash, Cash Equivalents and Short-Term Investments	43.56M	36.50M	32.03M	31.81M	34.26M
Total Debt	2.79M	2.00M	2.57M	1.29M	1.91M
Total Liabilities	11.09M	11.90M	6.88M	6.32M	4.95M
Stockholders Equity	100.93M	86.63M	86.11M	71.09M	69.43M
Cash Flow
Free Cash Flow	28.79M	23.79M	5.92M	3.63M	3.70M
Operating Cash Flow	29.35M	23.96M	15.07M	12.46M	8.95M
Investing Cash Flow	-11.16M	-9.57M	-9.15M	-8.83M	-5.24M
Financing Cash Flow	-11.14M	-9.92M	-5.70M	-6.08M	17.60M

Red Violet Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 43.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDVT, the sentiment is Negative. The current price of 43.45 is above the 20-day moving average (MA) of 42.87, below the 50-day MA of 46.75, and below the 200-day MA of 49.31, indicating a neutral trend. The MACD of -0.30 indicates Negative momentum. The RSI at 46.43 is Neutral, neither overbought nor oversold. The STOCH value of 29.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RDVT.

Red Violet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RDVT	73 Outperform	$613.08M	60.77	13.47%	―	22.27%	117.93%
VTEX	69 Neutral	$700.62M	17.45	8.24%	―	3.62%	-20.45%
RSKD	64 Neutral	$678.61M	-28.39	-8.42%	―	6.54%	-19.17%
IBTA	62 Neutral	$542.77M	180.36	4.70%	―	-4.42%	603.17%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
BMBL	51 Neutral	$316.80M	4.29	-27.49%	―	-7.43%	61.36%
DOMO	49 Neutral	$183.08M	-4.05	37.36%	―	-0.14%	21.60%

Red Violet Corporate Events

Red Violet Extends Executive Employment Agreements Through 2030

On January 9, 2026, Red Violet extended the employment agreements of its key executives, including the chief executive officer, president, chief financial officer and chief information officer, pushing the contract expiration date from March 26, 2027 to March 31, 2030. The move signals the company’s intent to ensure leadership continuity over the longer term, which may provide greater stability and strategic consistency for stakeholders as Red Violet executes its business plans over the next several years.

The most recent analyst rating on (RDVT) stock is a Buy with a $63.00 price target. To see the full list of analyst forecasts on Red Violet stock, see the RDVT Stock Forecast page.