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Red Violet Inc (RDVT)
NASDAQ:RDVT
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Red Violet (RDVT) AI Stock Analysis

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RDVT

Red Violet

(NASDAQ:RDVT)

Rating:74Outperform
Price Target:
$49.00
▲(15.46% Upside)
Red Violet's strong financial performance and positive earnings call sentiment are the primary drivers of its stock score. However, the high P/E ratio suggests overvaluation, and technical indicators point to potential short-term bearish momentum. The company's strategic investments in AI and customer expansion provide a positive long-term outlook.

Red Violet (RDVT) vs. SPDR S&P 500 ETF (SPY)

Red Violet Business Overview & Revenue Model

Company DescriptionRed 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 MoneyRed Violet generates revenue primarily through its subscription-based and transactional data services offered to businesses and organizations. The company provides access to its proprietary platform, which enables clients to perform detailed data analysis and obtain insights for risk management, fraud prevention, and identity verification. Key revenue streams include recurring subscription fees for platform access and usage-based fees for specific data services. Partnerships with industries such as financial services, insurance, and government agencies also contribute significantly to its earnings, as these sectors require robust data-driven solutions to mitigate risk and enhance operational efficiency.

Red Violet Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: -2.37%|
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with significant revenue growth, a record gross margin, and increased free cash flow. The company also reported substantial customer base expansion and strong revenue retention. Despite some challenges in the real estate vertical and previous one-time revenue impacts, the company's overall outlook remains positive with strategic investments in AI and platform capabilities.
Q2-2025 Updates
Positive Updates
Strong Year-Over-Year Revenue Growth
Revenue for the quarter increased by 14% to $21.8 million. Excluding $1 million of onetime transactional revenue from the prior year, revenue would have grown 21%.
Record Adjusted Gross Margin
Achieved a record adjusted gross margin of 84%, up 2 percentage points from the prior year.
Increase in Free Cash Flow
Free cash flow for the quarter was $4.8 million, a 47% increase from $3.3 million a year ago.
Expansion in Customer Base
Added 308 new customers to IDI and over 21,000 users to FOREWARN, reaching over 575 REALTOR Associations.
High Revenue Retention
Gross revenue retention was 97%, up 3 percentage points from the prior year.
Successful Contract Extension
Extended agreement with largest data supplier to April 30, 2031, with minimal cost escalation.
Negative Updates
Decline in Real Estate Vertical
IDI's real estate vertical, excluding FOREWARN, declined by single digits due to affordability pressures from high home prices and interest rates.
Challenges in Financial and Corporate Risk Vertical
Faced a challenging comparison to the prior year due to $1 million onetime transactional revenue, although it still delivered record revenue.
Company Guidance
During the Red Violet second quarter 2025 earnings call, the company reported a 14% increase in revenue to $21.8 million, with adjusted gross profit reaching $18.2 million and a record adjusted gross margin of 84%. Adjusted EBITDA was $7.6 million, with a margin of 35%, while adjusted net income stood at $4.1 million, translating to $0.28 per diluted share. The company generated $4.8 million in free cash flow and added over 300 customers to its IDI platform, ending the quarter with over 9,500 customers. FOREWARN also saw significant growth, adding over 21,000 users and reaching over 575 REALTOR Associations. Red Violet's revenue growth was driven by key sectors, including law enforcement, legal, government, and financial services, with a focus on expanding within existing customers. The company highlighted its ongoing investments in AI and automation to enhance productivity and operational efficiency, contributing to margin expansion and long-term growth strategy.

Red Violet Financial Statement Overview

Summary
Red Violet demonstrates strong financial health with consistent revenue and profit growth, efficient cost management, and robust cash flow generation. The company maintains a low debt level, indicating financial stability, though vigilance in liquidity management is advised.
Income Statement
85
Very Positive
Red Violet's income statement shows impressive growth trends. The company experienced a robust revenue growth rate of 5.98% from the previous year, with a gross profit margin of 85.41% and a strong net profit margin of 10.87% in the TTM period. EBIT and EBITDA margins have improved significantly to 12.73% and 25.47% respectively, indicating enhanced operational efficiency. These metrics highlight strong profitability and efficient cost management.
Balance Sheet
78
Positive
The balance sheet reflects a strong equity position with a Debt-to-Equity Ratio of 0.02, indicating low leverage. Return on Equity stands at 9.43%, suggesting effective use of equity to generate profits. The Equity Ratio is high at 92.68%, highlighting financial stability. However, the relatively low total asset base compared to liabilities suggests a potential risk in liquidity management.
Cash Flow
82
Very Positive
Cash flow analysis reveals positive trends, with a solid free cash flow growth rate of -26.74% due to previous high levels, yet still maintaining a healthy free cash flow generation of $17.43 million in the TTM period. The Operating Cash Flow to Net Income Ratio is 2.85, indicating robust cash generation relative to profits. These figures showcase strong cash flow health, supporting future growth and stability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue79.68M75.19M60.20M53.32M44.02M34.59M
Gross Profit68.05M61.19M47.13M41.11M32.83M23.31M
EBITDA20.30M17.48M10.86M596.00K4.08M-2.62M
Net Income8.66M7.00M13.53M616.00K655.00K-6.79M
Balance Sheet
Total Assets99.09M98.53M92.99M77.41M74.38M51.99M
Cash, Cash Equivalents and Short-Term Investments34.60M36.50M32.03M31.81M34.26M12.96M
Total Debt1.84M2.00M2.57M1.29M1.91M4.61M
Total Liabilities7.24M11.90M6.88M6.32M4.95M8.65M
Stockholders Equity91.85M86.63M86.11M71.09M69.43M43.34M
Cash Flow
Free Cash Flow17.43M23.79M5.92M3.63M3.70M857.00K
Operating Cash Flow24.66M23.96M15.07M12.46M8.95M6.52M
Investing Cash Flow-9.69M-9.57M-9.15M-8.83M-5.24M-5.66M
Financing Cash Flow-12.51M-9.92M-5.70M-6.08M17.60M324.00K

Red Violet Technical Analysis

Technical Analysis Sentiment
Negative
Last Price42.44
Price Trends
50DMA
46.76
Negative
100DMA
43.73
Negative
200DMA
39.84
Positive
Market Momentum
MACD
-1.04
Positive
RSI
37.50
Neutral
STOCH
45.67
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 42.44 is below the 20-day moving average (MA) of 44.81, below the 50-day MA of 46.76, and above the 200-day MA of 39.84, indicating a neutral trend. The MACD of -1.04 indicates Positive momentum. The RSI at 37.50 is Neutral, neither overbought nor oversold. The STOCH value of 45.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RDVT.

Red Violet Risk Analysis

Red Violet disclosed 32 risk factors in its most recent earnings report. Red Violet reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Red Violet Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$606.66M70.499.45%26.30%-40.35%
73
Outperform
$415.55M32.286.11%7.76%
68
Neutral
$1.36B34.5775.95%-7.41%
67
Neutral
$560.56M131.841.94%3.62%-53.21%
64
Neutral
$823.35M-9.00%9.30%24.96%
61
Neutral
$34.83B4.75-10.43%2.08%6.55%-10.00%
58
Neutral
$249.92M-36.64%3.84%-76.01%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RDVT
Red Violet
42.44
15.82
59.43%
MITK
Mitek Systems
9.13
0.71
8.43%
PRCH
Porch Group
14.89
13.61
1063.28%
PUBM
PubMatic
11.18
-2.88
-20.48%
LAW
CS Disco
4.39
-0.87
-16.54%
RSKD
Riskified
5.09
-0.82
-13.87%

Red Violet Corporate Events

Executive/Board ChangesShareholder Meetings
Red Violet Holds Annual Stockholders Meeting
Neutral
Jun 10, 2025

On June 10, 2025, Red Violet, Inc. held its Annual Meeting of Stockholders, where several key matters were voted upon. The election of directors resulted in the appointment of five individuals to serve until the next annual meeting in 2026. Additionally, the stockholders ratified the appointment of Grant Thornton, LLP as the independent public accounting firm for the year 2025. The amended and restated 2018 Stock Incentive Plan was approved, extending the plan’s term and increasing available shares for issuance. Lastly, the stockholders approved the compensation of the company’s named executive officers for 2024 on an advisory basis.

The most recent analyst rating on (RDVT) stock is a Buy with a $31.50 price target. To see the full list of analyst forecasts on Red Violet stock, see the RDVT Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 07, 2025