Direct Digital (NASDAQ:DRCT – Get Rating) and Inuvo (NYSE:INUV – Get 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 dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.
Earnings & Valuation
This table compares Direct Digital and Inuvo's gross revenue, earnings per share and valuation.
Get Direct Digital alerts:| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Direct Digital | $38.14 million | 1.95 | -$1.51 million | ($62.19) | -0.08 |
| Inuvo | $59.83 million | 0.82 | -$7.60 million | ($0.09) | -4.54 |
Direct Digital has higher earnings, but lower revenue than Inuvo. Inuvo is trading at a lower price-to-earnings ratio than Direct Digital, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and recommmendations for Direct Digital and Inuvo, as provided by MarketBeat.com.| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Direct Digital | 0 | 0 | 3 | 0 | 3.00 |
| Inuvo | 0 | 0 | 0 | 0 | N/A |
Direct Digital presently has a consensus price target of $6.50, suggesting a potential upside of 27.20%. Given Direct Digital's higher possible upside, equities research analysts plainly believe Direct Digital is more favorable than Inuvo.
Profitability
This table compares Direct Digital and Inuvo's 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% |
| Inuvo | -13.28% | -35.24% | -25.11% |
Insider and Institutional Ownership
7.3% of Direct Digital shares are held by institutional investors. Comparatively, 16.1% of Inuvo shares are held by institutional investors. 78.3% of Direct Digital shares are held by insiders. Comparatively, 8.3% of Inuvo shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
Direct Digital beats Inuvo on 9 of the 12 factors compared between the two stocks.
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.
About Inuvo
(Get Rating)
Inuvo, Inc. engages in the provision of artificial intelligence-driven commerce solutions. The firm provides platforms that can identify and message online audiences for any product or service across devices, channels and formats, including video, mobile, connected television, display, social and native. Its products and services include ValidClick, IntentKey and Digital Publishing. The ValidClick service is software for publishers that offers a pay-per-click solution where advertisements are targeted to consumers based on content and behaviors. The IntentKey service is a consumer intent recognition system designed to reach highly targeted mobile and desktop in-market audiences with precision. The Digital Publishing service includes branded web properties with content developed, edited and published by Inuvo. The company was founded in October 1987 and is headquartered in Little Rock, AR.
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