Red Violet, Inc. (RDVT) Stock Analysis

Red Violet’s principal competitive advantage lies in its proprietary, cloud-native identity intelligence platform (CORE), which enables real-time, high-confidence identity verification and risk analytics. Unlike legacy competitors such as TransUnion (TLO) and LexisNexis, RDVT’s platform is built from the ground up for scalability and rapid integration, allowing for efficient onboarding and high-volume data processing. This technical edge is reflected in gross margins consistently above 80% (Q3 2025: 84%), outpacing most peers.

The company’s data aggregation capabilities are a further differentiator. RDVT owns or controls unique, high-quality data assets, which underpin superior match rates and actionable insights. For example, in direct client tests, RDVT’s data yielded higher contact accuracy than TransUnion, reducing client inefficiency.

Customer retention is robust, with gross revenue retention at 96–97% in recent quarters, indicating high satisfaction and switching costs. The company’s “land and expand” sales model, combined with a focus on mission-critical use cases (e.g., fraud prevention, compliance), supports recurring, contractual revenue—75% of total in Q3 2025.

Management’s track record is notable: the team previously built and sold major platforms in the sector. RDVT’s culture emphasizes innovation and operational discipline, as seen in rapid product development and prudent capital allocation.

Risks include reliance on key data suppliers and the potential for regulatory shifts. However, RDVT’s technology, data quality, and customer loyalty provide a durable moat relative to slower-moving, less agile incumbents.