IAS

We rate INTEGRAL AD SCIENCE HOLDING CORP. (IAS) as a Hold with a composite score of 52.1/100 at a current price of $10.33. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (70th percentile) and value (57th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (26th percentile) and quality (50th percentile) tempers our overall conviction. We assign a Narrow Moat rating (44/100), Low uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

INTEGRAL AD SCIENCE HOLDING CORP. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 52.1/100 places it at rank #1677 in our full 7,333-stock universe. At $1.7B in market capitalization, INTEGRAL AD SCIENCE HOLDING CORP. is a small-cap player in the Services space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 16%, though momentum at the 53th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 77% (+17.4pp vs sector) narrow to operating margins of 5% (+1.4pp vs sector) and net margins of 4.6%, yielding a gross-to-net conversion rate of 6%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $10.33, INTEGRAL AD SCIENCE HOLDING CORP. is trading near fair value based on current fundamentals. Our value factor score of 57/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 60.0x (a 153% premium to the sector median of 23.7x), EV/EBITDA of 16.5x (at a premium), P/B of 1.5x, P/S of 2.7x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to INTEGRAL AD SCIENCE HOLDING CORP.. The company exhibits strong financial stability with moderate market sensitivity, conservative leverage (1% D/E), and a stability factor in the 70th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: elevated valuation multiple (P/E 60.0x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 70th percentile and quality factor at the 50th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 77% provide a buffer against cost pressures; conservative leverage (1% D/E) limits balance sheet risk; above-average stability (70th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate INTEGRAL AD SCIENCE HOLDING CORP.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 2.4%, and the balance sheet is managed within acceptable parameters (D/E: 1%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; INTEGRAL AD SCIENCE HOLDING CORP. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, INTEGRAL AD SCIENCE HOLDING CORP. receives a Hold rating with a composite score of 52.1/100 (rank #1677 of 7,333). Our quantitative framework assigns a Narrow Moat (44/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 51/100.

Our analysis supports a neutral stance on INTEGRAL AD SCIENCE HOLDING CORP.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.