Critical Analysis: Direct Digital (NASDAQ:DRCT) versus ITV (OTCMKTS:ITVPF)

ITV (OTCMKTS:ITVPF) and Direct Digital (NASDAQ:DRCT) are both communication services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for ITV and Direct Digital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ITV	0	0	0	0	0.00
Direct Digital	1	0	0	0	1.00

Profitability

This table compares ITV and Direct Digital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ITV	N/A	N/A	N/A
Direct Digital	-74.38%	N/A	-68.48%

Valuation and Earnings

This table compares ITV and Direct Digital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ITV	N/A	N/A	N/A	$0.10	12.34
Direct Digital	$34.69 million	0.05	-$18.95 million	($156.85)	-0.01

ITV has higher earnings, but lower revenue than Direct Digital. Direct Digital is trading at a lower price-to-earnings ratio than ITV, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

46.5% of ITV shares are held by institutional investors. Comparatively, 4.0% of Direct Digital shares are held by institutional investors. 25.6% of Direct Digital shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

ITV beats Direct Digital on 5 of the 8 factors compared between the two stocks.

About ITV

ITV plc, an integrated production, broadcasting, and streaming company, which creates, owns, and distributes content on various platforms worldwide. It operates through ITV Studios and Media & Entertainment segments. The ITV Studios segment creates and produces programs and formats that include sports, drama, entertainment, factual, and news for its own channels and other broadcasters. The segment also operates as an unscripted independent producer of content in the United States; and produces content for local broadcasters and international OTT platforms in Canada, Australia, Germany, France, Italy, Spain, the Netherlands, Sweden, Norway, Finland, and Denmark. In addition, this segment engages in licensing its finished programmes, formats, and third-party content internationally, as well as finances productions. The Media & Entertainment segment broadcasts and streams various contents on its family of free-to-air TV channels; and offers television advertising services. The company also delivers content through linear television broadcasting, as well as on the ITV Hub, BritBox UK, ITVX, catch up services on pay platforms, and through direct content deals. In addition, this segment offers online advertising, HD digital channel on pay platform, and ITV Premium subscription services. The company was founded in 1955 is based in London, the United Kingdom.

About Direct Digital

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, and other sectors with a focus on small and mid-sized businesses. The company was founded in 2018 and is headquartered in Houston, Texas.