12:10 PM EDT, 06/25/2024 (MT Newswires) -- DoubleVerify's ( DV ) disappointing Q1 results and its 2024 guidance raise questions about the company's growth prospects, Morgan Stanley said in a Tuesday note.

Morgan Stanley said the firm now needs to address concerns around slower large customer growth, softer open web ad spend and weaker product fit in CTV/social.

"While we had previously expected DV to significantly outperform online ad market growth over a multi-year period, the company's results/guidance have meaningfully undershot our expectations year to date in '24," the note said.

The management has pointed to headwinds like "weaker spending from a group of large customers and a mix shift towards lower-priced products," Morgan Stanley said.

"While these would be noteworthy under any circumstances, we note that DV's challenges have coincided with weaker results at IAS (i.e. the other half of the duopoly in this market)," the report said. "In our view, this could suggest that both companies' issues could be more macro than micro."

Morgan Stanley downgraded the stock to equal-weight from overweight and cut its price target to $21 from $40.

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