WPP (NYSE:WPP) versus Direct Digital (NASDAQ:DRCT) Critical Comparison

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

Analyst Recommendations

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

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

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

Institutional & Insider Ownership

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

Profitability

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

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

Volatility & Risk

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

Valuation and Earnings

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

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

WPP has higher revenue and earnings than Direct Digital.

Summary

WPP beats Direct Digital on 6 of the 10 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 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.