Comparing OneConnect Financial Technology (NYSE:OCFT) & Direct Digital (NASDAQ:DRCT)

OneConnect Financial Technology (NYSE:OCFTGet Rating) and Direct Digital (NASDAQ:DRCTGet Rating) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Earnings & Valuation

This table compares OneConnect Financial Technology and Direct Digital’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OneConnect Financial Technology $640.51 million 0.63 -$198.66 million ($0.50) -2.06
Direct Digital $38.14 million 0.27 N/A N/A N/A

Direct Digital has lower revenue, but higher earnings than OneConnect Financial Technology.

Profitability

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

Net Margins Return on Equity Return on Assets
OneConnect Financial Technology -26.52% -29.93% -12.33%
Direct Digital N/A N/A N/A

Analyst Recommendations

This is a summary of recent ratings for OneConnect Financial Technology and Direct Digital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OneConnect Financial Technology 1 1 0 0 1.50
Direct Digital 0 0 3 0 3.00

OneConnect Financial Technology currently has a consensus target price of $1.59, suggesting a potential upside of 54.37%. Direct Digital has a consensus target price of $6.17, suggesting a potential upside of 86.30%. Given Direct Digital’s stronger consensus rating and higher probable upside, analysts clearly believe Direct Digital is more favorable than OneConnect Financial Technology.

Institutional and Insider Ownership

5.7% of OneConnect Financial Technology shares are owned by institutional investors. Comparatively, 2.4% of Direct Digital shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Direct Digital beats OneConnect Financial Technology on 6 of the 9 factors compared between the two stocks.

About OneConnect Financial Technology

(Get Rating)

OneConnect Financial Technology Co., Ltd. provides cloud-platform-based Fintech solutions, and online information and operating support services for financial institutions in the People's Republic of China. It offers digital retail banking, digital commercial banking, digital auto insurance and life insurance, and artificial intelligence customer services, as well as sales management, risk management, and operation support services. The company also operates gamma core banking system, a customer centric solution; digitalized management platform that offers digital infrastructure for financial institutions to manage various aspects of their business, including data, smart operation, comprehensive risk, and asset and liability management, as well as accounting, personnel, and office management; Gamma FinCloud, an open PaaS and IaaS platform for ready-to-integrate financial technology components; and Blockchain network-as-a-service. In addition, it operates Regtech, an end-to-end regulatory solution to help regulatory authorities automate and digitalize their operations; and offers asset management and consulting services. The company serves customers in the financial services industry, including banking, insurance, and other financial institutions. It has a strategic agreement with the Hainan Local Financial Supervision Administration to develop smart financial and smart supervision services in the island province of Hainan, as well as the financial sector in Hainan free trade port. OneConnect Financial Technology Co., Ltd. was founded in 2015 and is headquartered in Shenzhen, the People's Republic of China.

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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