Home » Innovid Stock: An ad tech company focusing on CTV

Innovid Stock: An ad tech company focusing on CTV

by Investoradar

Innovid (CTV) is going public through a SPAC deal with blank check company ION Acquisition Corp. The company is an Ad-Tech company that focuses heavily on connected tv (CTV). Connected TV is one of the fastest-growing advertising spaces right now, due to the trend of cord-cutting and households shifting from traditional linear tv to connected tv. The current advertising spending on TV is around $200 billion with $15–20 billion on CTV. As more and more people shifts to CTV, the spending on CTV ads will increase over time. According to the recent earnings from ad tech companies like The Trade Desk (TTD), Magnite (MGNI), Pubmatic (PUBM), and Perion Network (PERI), revenues from CTV are exploding. 

Innovid is the leading independent ad delivery and measurement Platform for Connected TV. Its platform allows companies to automatically upload and encode advertising creative to stream ads to any screen or device, manages the physical delivery of ads, which allows marketers and publishers to connect in real-time, and measures performance across different metrics. The company also started offering personalized ads and Interactive ads to increase its platform’s capability. Unlike other companies mentioned above which compete with each other, Innovid partners with them. It integrates with demand-side platforms and supply-side platforms to strengthen its own ecosystem. This puts them in a unique market position with a highly defensive moat.

The company’s CTV impression volume grew from 2 billion in January 2018 to 12 billion in January 2021 which represented a 500% growth in just three years. The company’s 2020 revenue is $69 million and it is projected to grow at a CAGR of 37% till 2023 with revenue of around $177 million. CTV will account for 63% of the revenue while mobile tv and desktop tv will account for the rest. The company’s gross margin is at around 80% which is above most ad tech companies and its net revenue retention rate stood at a very impressive 120%. Also, it is already generating a positive EBITDA of $7.2 million this year with an EBITDA margin of 7.2% and is forecast to grow to 19% in 2023. After the SPAC merger is completed the company will trade at an enterprise value of $1.1 billion, this translates to a 2022 EV/sales of 8.5 which is compelling considering its growth and margin profile. For investors that are interested in investing in the CTV space, Innovid is definitely worth a look at. 

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