AdStar (OTCMKTS:ADST) versus Direct Digital (NASDAQ:DRCT) Critical Survey

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

Institutional & Insider Ownership

4.0% of Direct Digital shares are held by institutional investors. 46.9% of Direct Digital shares are held by insiders. Comparatively, 22.6% of AdStar shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Direct Digital and AdStar’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%
AdStar	N/A	N/A	N/A

Earnings & Valuation

This table compares Direct Digital and AdStar”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Direct Digital	$62.29 million	0.05	-$6.24 million	($1.36)	-0.08
AdStar	N/A	N/A	N/A	N/A	N/A

AdStar has lower revenue, but higher earnings than Direct Digital.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Direct Digital	1	1	1	0	2.00
AdStar	0	0	0	0	0.00

Direct Digital currently has a consensus target price of $6.00, indicating a potential upside of 5,776.59%. Given Direct Digital’s stronger consensus rating and higher probable upside, analysts plainly believe Direct Digital is more favorable than AdStar.

Summary

Direct Digital beats AdStar on 6 of the 8 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 AdStar

AdStar, Inc. engages in the provision of advertising technology services to publishers. It focuses on its application service provider. The company was founded by Leslie Bernhard and Eli Rousso in 1986 and is headquartered in Marina del Rey, CA.