Is Now An Opportune Moment To Examine AdTheorent Holding Company, Inc. (NASDAQ:ADTH)?

AdTheorent Holding Company, Inc. (NASDAQ:ADTH), might not be a large cap stock, but it led the NASDAQCM gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on AdTheorent Holding Company’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for AdTheorent Holding Company

Is AdTheorent Holding Company Still Cheap?

AdTheorent Holding Company appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that AdTheorent Holding Company’s ratio of 19.79x is above its peer average of 12.4x, which suggests the stock is trading at a higher price compared to the Media industry. In addition to this, it seems like AdTheorent Holding Company’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will AdTheorent Holding Company generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 44% over the next couple of years, the future seems bright for AdTheorent Holding Company. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in ADTH’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe ADTH should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on ADTH for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for ADTH, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing AdTheorent Holding Company at this point in time. While conducting our analysis, we found that AdTheorent Holding Company has 2 warning signs and it would be unwise to ignore these.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.