Direct Digital (NASDAQ: DRCT – Get Rating) and Rackspace Technology (NASDAQ: RXT – Get Rating) are both small-cap business services companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.
Earnings & Valuation
This table compares Direct Digital and Rackspace Technology’s revenue, earnings per share and valuation.
|Gross Revenue||Price / Sales Ratio||Net Income||Earnings Per Share||Price / Earnings Ratio|
|Direct Digital||$ 38.14 million||0.17||ON||ON||ON|
|Rackspace Technology||$ 3.01 billion||0.49||– $ 218.30 million||($ 0.92)||-7.62|
Direct Digital has higher earnings, but lower revenue than Rackspace Technology.
This is a breakdown of recent ratings and price targets for Direct Digital and Rackspace Technology, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Direct Digital presently has a consensus price target of $ 5.83, suggesting a potential upside of 155.85%. Rackspace Technology has a consensus price target of $ 13.25, suggesting a potential upside of 89.02%. Given Direct Digital’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Direct Digital is more favorable than Rackspace Technology.
Institutional and Insider Ownership
9.6% of Direct Digital shares are owned by institutional investors. Comparatively, 95.9% of Rackspace Technology shares are owned by institutional investors. 2.1% of Rackspace Technology shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Direct Digital and Rackspace Technology’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Rackspace Technology beats Direct Digital on 7 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, etc. with focus on small- and mid-sized businesses. The company was founded in 2018 and is headquartered in Houston, Texas.
About Rackspace Technology
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