Kidoz Inc. (TSX-V:KIDZ) got two thumbs up for its child-friendly advertising platform from a pair of brokers, one that maintained its ‘Buy’ rating, and another that recently initiated coverage with the same rating.
Fundamental Research Corp maintained a ‘Buy’ rating on the mobile AdTech developer and owner of the market-leading Kidoz Contextual Ad Network and the Kidoz Publisher SDK (software development kit), while adjusting its fair value estimate from C$1.90 to $1.69 per share.
In a report, the broker said Israel-based Kidoz is growing faster than YouTube and Meta, noting that YouTube’s ad revenue was down 2% year-over-year in 3Q, while Meta’s ad revenue dropped 4% year-over-year.
READ: Kidoz says record quarterly revenue growth continues in Q3 2022; retains full-year guidance
Meanwhile, Fundamental Research said Kidoz’s third quarter revenue was up 25% year over year, following up on a 15% rise year-over-year in the second quarter.
The broker added it expects Kidoz’s earnings per share to turn positive in the fourth quarter, adding that quarter accounts for 50% of Kidoz’ annual revenue.
Key operating metrics such as 503 million monetized impressions and 255 million video views were up 46% and 111% respectively year-over-year, the Fundamental Research analysts said, adding Kidoz management has maintained their 2022 revenue guidance of C$16 million to $18 million.
“As 3Q was weaker than expected, we are lowering our estimate by 5% to $16.2 million,” the analysts wrote, adding, “We were pleased to see Kidoz diversifying its revenue base outside North America. Europe accounted for 34% of revenue in 3Q-2022 versus 25% in 3Q-2021.”
Research Capital initiated coverage at the beginning of October, with a ‘Buy’ rating and a target price of C$1.00 per share, saying Kidoz has a competitive advantage thanks to its niche focus on children.
“Kidoz is among the 11 ad network SDKs certified by Google to advertise to kids. Based on our knowledge, Kidoz is the only company other than ‘Superawesome’ focused solely on kids,” the Research Capital analysts wrote.
Research Capital said Kidoz market share should grow consistently due to a structural shift of digital advertising to in-app advertising.
“We view Kidoz's partnership with well-known brands such as Lego and Disney as a testimony of Kidoz’s strong brand value. Kidoz SDK is installed in more than 4,000 apps worldwide with a monthly active user base of over 300 million. Installation of Kidoz SDK in prominent apps such as Hippo and Play kids demonstrates the company’s track record in delivering results for publishers,” the analysts wrote.
Contact the author at susie@proactiveinvestors.com