AI Automation And CTV Adoption Will Catalyze Secular Expansion

Key Takeaways

• Viant's proprietary data, AI automation, and direct CTV access give it potential to outpace industry growth, boost margins, and command premium pricing power.
  
• Strategic positioning amid privacy changes and strong enterprise adoption strengthen Viant's moat, fueling customer stickiness and expectations of exceeding long-term growth forecasts.
  
• Intensifying competition, regulatory headwinds, and market shifts threaten Viant's data access, advertiser demand, margins, and long-term relevance in the digital advertising ecosystem.

Catalysts

Operates as an advertising technology company.

• While analyst consensus expects CTV's ongoing digital share gains and Viant's premium publisher integrations to incrementally grow revenue, Viant's Direct Access program-with direct pipelines into major CTV OEMs like LG and unique data-matching with Household ID and IRIS_ID-could accelerate CTV market share gains far above industry growth, unlocking a step-function increase in both revenue and contribution ex-TAC as CTV ad budgets consolidate around Viant's platform at a faster rate than forecast.
  
• Analyst consensus views ViantAI's platform automation as a significant margin enhancer, but the combination of fully autonomous AI Decisioning, seamless cross-channel planning, and daily actionable measurement could enable Viant to leapfrog industry standards-realizing both sustained operating leverage and premium pricing power, supporting multi-year structural expansion in net and EBITDA margins not captured by standard market models.
  
• The rollout of ViantAI and addressability solutions positions the company to tap millions of SMB, DTC, and performance advertisers now locked into walled gardens; migration of even a small fraction of this multi-hundred-billion dollar pool to Viant's transparent, open-web DSP could double platform revenue opportunity within 2 to 3 years and dramatically accelerate total revenue growth.
  
• Intensifying privacy regulation and the shift away from third-party cookies is strengthening Viant's moat; its patented Household ID and IRIS_ID coverage of 95 percent of U.S. households and 80 percent of biddable inventory is likely to drive exceptional client stickiness and enterprise contract wins from brands seeking compliant, future-proof partners, supporting higher gross and net revenue retention rates.
  
• Viant's ongoing strategic investments in direct relationships with major brands, self-service efficiency, and frictionless switching are rapidly breaking down historical barriers to market share; combined with a robust balance sheet, rising customer concentration among large spenders, and over $250 million in new annualized gross ad spend pipeline, Viant is positioned to outgrow the industry and materially surpass current long-term revenue and earnings expectations.

Viant Technology Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Viant Technology compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Viant Technology's revenue will grow by 16.0% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 0.7% today to 9.5% in 3 years time.
• The bullish analysts expect earnings to reach $47.2 million (and earnings per share of $1.21) by about September 2028, up from $2.4 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 44.8x on those 2028 earnings, down from 70.2x today. This future PE is greater than the current PE for the US Software industry at 36.2x.
• Analysts expect the number of shares outstanding to grow by 1.29% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.5%, as per the Simply Wall St company report.

Viant Technology Future Earnings Per Share Growth

Risks

• Viant faces intensifying competition from walled gardens such as Google, Meta, and Amazon, which control a majority of user data and digital advertising inventory, limiting Viant's access to high-quality data and premium placements and potentially restricting revenue growth and market share over time.
  
• Increasing consumer privacy regulations and shifts away from third-party cookies risk undermining the effectiveness of Viant's addressability and targeting solutions, which could make its platform less attractive to advertisers, leading to reduced advertiser demand and negatively impacting both revenue and net margins in the long term.
  
• The programmatic advertising ecosystem is becoming more fragmented and complex, with new intermediaries, ad formats, and channels driving up operational costs and reducing transparency, which challenges Viant's ability to maintain efficiency and could result in narrowing net margins and weaker earnings.
  
• Viant's relatively small scale and lower brand recognition versus dominant adtech players could make it harder to attract and retain premium clients, compelling Viant to spend heavily on R&D and sales, which increases the risk of ongoing margin pressure and difficulty achieving sustained profitability.
  
• As advertising budgets increasingly shift towards retail media networks, influencer marketing, and direct publisher partnerships, the addressable market for open-web DSPs like Viant may stagnate or contract, threatening top-line revenue growth and eroding Viant's role in the digital ad supply chain over time.

Valuation

• The assumed bullish price target for Viant Technology is $25.46, which represents two standard deviations above the consensus price target of $19.0. This valuation is based on what can be assumed as the expectations of Viant Technology's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $26.0, and the most bearish reporting a price target of just $15.0.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $497.6 million, earnings will come to $47.2 million, and it would be trading on a PE ratio of 44.8x, assuming you use a discount rate of 8.5%.
• Given the current share price of $10.16, the bullish analyst price target of $25.46 is 60.1% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.