2 actions of advertising agencies to add to your portfolio
Online advertising is gradually replacing traditional advertising in a context of rapid digital transformation. Global ad spending is expected increase 14% from its value a year ago to $ 657 billion in 2021. With increasing consumer spending, businesses now recognize the need for aggressive advertising and marketing to attract and retain customers in an increasingly competitive business environment.
Global advertising revenue is expected jump 19% to $ 749 billion in 2021.
Given the expected increase in advertising spending, Criteo SA (CRTO) and QuinStreet, Inc. (QNST) are expected to experience a substantial improvement in their finances and profit margins in the short term. So we think these two stocks could be solid additions to our portfolio now.
Criteo SA (CRTO)
Based in France, CRTO is a technology company that provides marketing and monetization services on the open Internet. Its solution includes the Criteo engine, company data assets, inventory access, and its advertiser and publisher platforms.
On June 16, the CRTO and the Carrefour Group signed an agreement under which Carrefour will use the new CRTO platform to market its stocks. This decision is part of the CRTO’s transformation strategy aimed at strengthening its position in the Commerce Media space.
On May 20, CRTO announced the acquisition of Mabaya, a leading multimedia retail technology company. This should allow the CRTO to expand its capacities and generate new sources of income.
CRTO’s revenue grew 7% year-over-year to $ 541 million in its fiscal first quarter, ended March 31. Its net profit rose 43% from its value a year ago to $ 23 million. The company’s EPS increased 40% year-on-year to $ 0.35. Its cash flow from operating activities increased 36% from the prior year quarter to $ 77 million during this period.
Analysts expect CRTO’s revenue to grow 6.7 percent year-on-year to $ 880.21 million for the current year. A consensus EPS estimate of $ 2.31 for the current year indicates a 6.5% increase over last year. Additionally, CRTO has beaten Street’s EPS estimates in each of the past four quarters, which is impressive. CRTO shares have gained 240.1% in the past year and 102% since the start of the year.
It’s no surprise that CRTO has an overall rating of B, which equates to Buy from Our Own POWR odds system. POWR scores are calculated by considering 118 different factors, each factor being weighted to an optimal degree.
The stock also has an A rating for growth and a B rating for value, momentum and quality. Among the 43 actions of Internet services industry, CRTO is ranked # 3.
To see additional CRTO ratings for feeling and stability, Click here.
QuinStreet, Inc. (QNST)
QNST in Foster City, Calif., Is a digital performance marketing products and media company that provides customer acquisition services to its customers. The company offers online marketing services in the form of qualified clicks, leads, ad display, or impressions through its websites or the websites of third-party publishers.
QNST’s net revenues increased 19% year-on-year to $ 153.05 million in its fiscal third quarter ended March 31. Its gross profit was $ 20.39 million, up 41.1% from the same period last year. Its operating profit rose 55.9% from a year ago to $ 6.25 million. Its cash and cash equivalents balance increased 6.2% from the prior year quarter to $ 103.22 million during this period.
A consensus estimate of revenue of $ 569.9 million for the current year indicates a 16.2% year-over-year increase. The Street expects the company’s EPS to increase 30% from a year ago to $ 0.65 in the current year. QNST also has an impressive history of earnings surprises; it has beaten consensus EPS estimates in each of the past four quarters. QNST has gained 57.7% over the past year to close yesterday’s trading session at $ 17.88.
QNST has an overall rating of B, which is equivalent to Buy in our proprietary POWR rating system. QNST has an A rating for sentiment and a B rating for growth and momentum. It is ranked # 9 in the same industry.
Click here to view additional QNST ratings for quality, value, and stability.
Shares of CRTO were trading at $ 39.75 a share on Friday afternoon, down $ 1.67 (-4.03%). Year-to-date, CRTO has gained 93.81%, compared to a 16.18% increase in the benchmark S&P 500 over the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After obtaining a master’s degree in economics, she acquired knowledge in equity research and portfolio management at Finlatics. After…