AI marketing solutions provider Inuvo slides despite strong fourth-quarter earnings

Quotes on Inuvo, a provider of AI-driven advertising technology, dropped almost 4% on Friday, February 28, after the company posted record revenue and positive net income for the fourth quarter of 2024 versus a loss a year earlier. The market was disappointed by a decline in its gross margin, which the company expects to continue in 2025 as well, according to financial news and data site GuruFocus.

On Friday, shares of Inuvo, which has a market capitalization of $58 million, slipped almost 4% on the New York Stock Exchange to $0.41 per share, before clawing back about 1% in premarket trading today, March 3. The stock is now down more than 36% for the year to date and off almost 16% over the last 12 months.

On Thursday, the company reported a 13% year-over-year increase in revenue for the full-year 2024 to $83.8 million. The main driver behind the growth was a  record-breaking fourth-quarter performance, which included revenue of $26.2 million, up 26% year over year, and net income of $141,000, versus a $2.4 million loss in the previous-year period. Still, the gross margin fell 4.0 percentage points to 83.1% in the fourth quarter, though it came in basically flat year over year for 2024. In addition, Inuvo guides for a slight decline in the gross margin in 2025, as pointed out by GuruFocus.

Inuvo specializes in AI-powered advertising solutions. Its flagship product, IntentKey, is a platform that, according to the company, can target audiences without using cookies. Instead of focusing on who consumers are, it identifies the reasons behind their interest in specific products, services, or brands.

This means Inuvo’s technology does not use confidential data, which is increasingly regulated by governments.

IntentKey also democratizes advertising, claims Inuvo CEO Richard Howe. It allows anyone to execute targeting immediately, by giving the AI nothing other than some simple audience descriptions. During the fourth-quarter earnings call, Howe, as quoted by GuruFocus, highlighted the platform’s margin of over 90%, as it leverages existing AI infrastructure with minimal additional costs.

According to MarketWatch, the lone analyst covering Inuvo has a “buy” recommendation, with a target price of $1.25 per share, more than three times the last closing price.