Analyzing WPP (NYSE:WPP) and Direct Digital (NASDAQ:DRCT)

WPP (NYSE:WPP) and Direct Digital (NASDAQ:DRCT) are both business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Earnings and Valuation

This table compares WPP and Direct Digital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WPP	$18.84 billion	0.22	$692.62 million	N/A	N/A
Direct Digital	$62.29 million	0.01	-$6.24 million	($74.73)	-0.02

WPP has higher revenue and earnings than Direct Digital.

Insider and Institutional Ownership

4.3% of WPP shares are owned by institutional investors. Comparatively, 4.0% of Direct Digital shares are owned by institutional investors. 1.0% of WPP shares are owned by company insiders. Comparatively, 25.6% of Direct Digital shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for WPP and Direct Digital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WPP	2	4	1	0	1.86
Direct Digital	1	1	1	0	2.00

Direct Digital has a consensus target price of $330.00, suggesting a potential upside of 26,300.00%. Given Direct Digital’s stronger consensus rating and higher possible upside, analysts clearly believe Direct Digital is more favorable than WPP.

Volatility and Risk

WPP has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Direct Digital has a beta of 5.99, meaning that its share price is 499% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
WPP	N/A	N/A	N/A
Direct Digital	-26.76%	N/A	-39.57%

Summary

WPP beats Direct Digital on 6 of the 10 factors compared between the two stocks.

About WPP

WPP plc, a creative transformation company, provides communications, experience, commerce, and technology services in North America, the United Kingdom, Western Continental Europe, the Asia Pacific, Latin America, Africa, the Middle East, and Central and Eastern Europe. The company operates through three segments: Global Integrated Agencies, Public Relations, and Specialist Agencies. It offers marketing strategy, creative ideation, production, commerce, influencer marketing, social media management, and technology implementation services; media strategy, planning, buying and activation, commerce media, data analytics, and consulting services; and media management, public affairs, reputation, risk and crisis management, social media management, and strategic advisory services. The company also provides brand consulting, brand identity, product and service design, and corporate and brand publication services. WPP plc was founded in 1985 and 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.