Financial Analysis: Direct Digital (DRCT) versus The Competition

Direct Digital (NASDAQ:DRCTGet Rating) is one of 32 public companies in the “Advertising” industry, but how does it weigh in compared to its rivals? We will compare Direct Digital to similar businesses based on the strength of its institutional ownership, earnings, profitability, risk, dividends, valuation and analyst recommendations.

Profitability

This table compares Direct Digital and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Direct Digital 0.87% 99.00% 6.44%
Direct Digital Competitors -16.75% -78.64% -6.32%

Earnings and Valuation

This table compares Direct Digital and its rivals gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Direct Digital $38.14 million -$1.51 million -0.04
Direct Digital Competitors $1.30 billion $559.00 million 5.65

Direct Digital’s rivals have higher revenue and earnings than Direct Digital. Direct Digital is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

2.4% of Direct Digital shares are held by institutional investors. Comparatively, 36.1% of shares of all “Advertising” companies are held by institutional investors. 16.0% of shares of all “Advertising” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Direct Digital and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Direct Digital 0 0 3 0 3.00
Direct Digital Competitors 104 402 586 7 2.45

Direct Digital presently has a consensus target price of $6.50, suggesting a potential upside of 161.04%. As a group, “Advertising” companies have a potential upside of 92.86%. Given Direct Digital’s stronger consensus rating and higher probable upside, equities analysts plainly believe Direct Digital is more favorable than its rivals.

About Direct Digital

(Get Rating)

Direct Digital Holdings, Inc. operates as an end-to-end full-service programmatic advertising platform. The company's platform primarily focuses on providing advertising technology, data-driven campaign optimization, and other solutions to underserved and less efficient markets on both the buy- and sell-side of the digital advertising ecosystem. It serves various industry verticals, such as travel, healthcare, education, financial services, consumer products, etc. with focus on small- and mid-sized businesses. The company was founded in 2018 and is headquartered in Houston, Texas.

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