May 31, 2023


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This Ad Tech Stock Jumped 975% in 2020. Can It Preserve Surging in 2021?

The ad tech marketplace has been 1 of the biggest winners all through the pandemic.

A surge in display time and tech dependence merged with a increase in Related Tv set, or advert-dependent streaming, seem to be to be driving a tipping level in the sector. In 2020, a amount of field players, which include The Trade DeskMagnite, and Roku, all surged as the chart underneath shows, and they’ve ongoing to get in 2021.

TTD Chart

TTD knowledge by YCharts

Nevertheless, one particular less than-the-radar advert tech business dependent in Canada outperformed all of them. AcuityAds (OTC:ACUI.F) concluded the yr up nearly 1,000%, attaining in the 2nd half of the calendar year on hopes for its new self-provide system, illumin, and the broader growth in advert tech, specially as Related Tv (CTV) is swiftly attaining share in the massive video marketing sector.

Will Acuity hold climbing in 2021? Here’s what traders need to preserve an eye on.

A woman looking at a glass wall showing different TV screens

Image resource: Getty Illustrations or photos.

A fast commence to illumin

Just after launching illumin in Oct, AcuityAds delivered its first update final thirty day period. General performance topped anticipations as illumin created additional than $1.5 million in the fourth quarter. When that may well not audio like a lot, keep in brain that AcuityAds’ current market cap is however below $1 billion, and this is just the very first quarter that illumin has been on the current market. In an interview past week, CEO Tal Hayek stated he predicted revenue to accelerate from the fourth quarter to the to start with quarter.

To begin with, the enterprise had projected that illumin would have a beneficial outcome on in general earnings by the second 50 % of the yr, because of in part to a longer predicted revenue cycle for the system as it is a new merchandise in the market. Even so, large need has led the organization to pull that timeline forward, supplying fourth-quarter revenue a modest improve. Acuity has also been hustling to develop its workforce to assistance the elevated desire, which include in its product sales drive and on the tech side. 

Discussing consumer need and curiosity for illumin, Hayek explained: “Our pipelines are acquiring greater and more substantial by the day.”

Buyers also seem delighted with the new system. A person illumin buyer said by e-mail: “Illumin is in contrast to any of the other top rated DSPs (Demand from customers Side Platforms) that we operate with. Most partners are stuck on campaigns that map creatives to large audiences but really don’t easily allow the user self-determine when they are all set to be moved to an additional advertising and marketing path.”

It really is important for traders to understand that ad tech, or platforms like the demand-aspect platform Acuity operates, is not a winner-just take-all market. In reality, companies do not even have exclusivity with personal shoppers, as several use numerous DSPs, which includes Trade Desk or Roku’s Dataxu, in accordance to have to have and marketing campaign. This customer, a foremost DTC model that performs with multiple DSPs, stated that it evaluates each a person on return on financial investment targets and named Acuity a “top rated performer.”

Other aspects to enjoy

Hayek said that Acuity, which is traded in Toronto and more than the counter, is aiming for an initial public providing on the Nasdaq in the subsequent couple months. That must be a constructive catalyst for the inventory, as it will carry much more awareness from Wall Road and boost the likely pool of traders.

In other places, Acuity’s effectiveness has suffered during COVID-19, as about a 3rd of its revenue base arrived from the travel and hospitality business, which has been challenging-strike all through the pandemic. Earnings slipped 3% to $26.1 million in the third quarter, but the firm has discovered new consumers in parts like e-commerce and shopper packaged items to swap that shortfall. The very good news there is that small business from the vacation sector ought to return as the pandemic fades, offering the firm a secular tailwind. Furthermore, like other advert tech organizations, Acuity is benefiting from the boom in Connected Tv set, where its income surged 353% in the most the latest quarter, evidence of another promising progress opportunity.

Acuity has not nevertheless introduced its fourth-quarter earnings day, but Hayek expects the report to occur out in the initial week of March. When the pandemic is very likely to nonetheless be a headwind, traders ought to look out for further more updates on illumin and a prospective IPO.

With much better-than-envisioned progress from illumin, a possible Nasdaq giving, and the financial reopening just after pandemic, the factors are in put for this modest-cap stock to deliver an additional solid overall performance in 2021.