Direct Digital (NASDAQ:DRCT – Get Free Report) and IDW Media (OTCMKTS:IDWM – Get Free Report) are both small-cap business services companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.
Profitability
This table compares Direct Digital and IDW Media’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Direct Digital | 0.75% | 25.32% | 1.89% |
| IDW Media | -17.42% | -25.73% | -20.18% |
Institutional and Insider Ownership
2.2% of Direct Digital shares are owned by institutional investors. Comparatively, 0.5% of IDW Media shares are owned by institutional investors. 80.8% of Direct Digital shares are owned by company insiders. Comparatively, 28.5% of IDW Media shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Direct Digital | $113.35 million | 0.31 | $4.17 million | $0.06 | 41.58 |
| IDW Media | $36.09 million | 0.15 | -$750,000.00 | ($0.33) | -1.21 |
Direct Digital has higher revenue and earnings than IDW Media. IDW Media is trading at a lower price-to-earnings ratio than Direct Digital, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Direct Digital has a beta of 4.11, meaning that its stock price is 311% more volatile than the S&P 500. Comparatively, IDW Media has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and price targets for Direct Digital and IDW Media, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Direct Digital | 0 | 0 | 3 | 0 | 3.00 |
| IDW Media | 0 | 0 | 0 | 0 | N/A |
Direct Digital presently has a consensus target price of $6.92, suggesting a potential upside of 177.23%. Given Direct Digital’s higher possible upside, analysts clearly believe Direct Digital is more favorable than IDW Media.
Summary
Direct Digital beats IDW Media on 13 of the 13 factors compared between the two stocks.
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.
About IDW Media
IDW Media Holdings, Inc., a diversified media company, engages in the publishing and television entertainment businesses worldwide. It operates through IDW Publishing and IDW Entertainment segments. The IDW Publishing segment publishes comic books, graphic novels, and digital content through its imprints IDW, Top Shelf Productions, and Artist's Editions. The IDW Entertainment segment develops, produces, and distributes content in various formats, including film and television. The company was formerly known as CTM Media Holdings, Inc. and changed its name to IDW Media Holdings, Inc. in July 2015. IDW Media Holdings, Inc. was incorporated in 2009 and is headquartered in Newark, New Jersey.
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