Digital advertising has been around since the early days of the internet. Over time, it has transformed in many ways, from personalized ads and social media integration to the latest innovations like GenAI. These advancements continue to drive the industry's steady growth.
Amid this backdrop, investors could scoop up shares of fundamentally stable digital advertising stocks, Criteo S.A. (CRTO), Ziff Davis, Inc. (ZD), and PubMatic, Inc. (PUBM) that are capitalizing on the shift away from conventional advertising methods.
With rising social media usage in recent years, the prospects of advertisers on these platforms have also surged. According to a study by the Pew Research Center, more than half of U.S. adults now use Instagram, with smaller numbers on TikTok, LinkedIn, X, and other similar platforms. This massive influx of users into these platforms has boosted the opportunities for digital advertising.
Apart from increased social media presence, another driver that has been aiding the sector in widespread popularity is GenAI and other advancements. With the advent of GenAI, the world has moved beyond simple automation to a new era where AI can generate fresh, dynamic content tailored to individual users and evolve in real time, resulting in greater prospects for sales for enterprises.
According to a report by Grand View Research, the global digital advertising market is forecasted to reach $1.16 trillion by 2030, growing at a CAGR of 15.4%.
Now, let us dive deep into the fundamentals of three digital advertising stocks, starting with #3.
Stock #3: Criteo S.A. (CRTO)
CRTO provides marketing and monetization services on the open Internet. The company offers Criteo Shopper Graph, a platform for its clients’ proprietary commerce data, and Criteo AI Engine solutions, which are AI-powered solutions.
On October 29, 2024, CRTO announced collaborations with leading Order Management System (OMS) companies, ADvendio, Boostr, Placements.io, Vantage, and Salesforce Media Cloud. The collaboration aims to integrate new capabilities to provide CRTO users with increased flexibility when building, managing, and scaling their retail media networks.
For the fiscal 2024 fourth quarter that ended December 31, 2024, CRTO’s revenue amounted to $553.04 million. Its income from operations increased 7% from the year-ago value to $94.51 million.
Additionally, the company’s adjusted net income and adjusted net income per share grew 10.9% and 15.1% from the prior year’s quarter to $100.84 million and $1.75, respectively.
Analysts expect CRTO’s revenue for the fiscal 2025 first quarter (ending in March) to increase 2.2% year-over-year to $259.57 million. Also, the company has surpassed consensus EPS estimates in all four trailing quarters, which is impressive.
Looking ahead, CRTO’s revenue for the fiscal 2025 second quarter ending in June is expected to increase 4.6% year-over-year to $279.38.
Its shares have surged 19.3% over the past three months and 37% over the year to close the last trading session at $43.99.
CRTO’s POWR Ratings reflect its strong fundamentals. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CRTO has an A grade for Value and a B for Growth and Sentiment. Within the Advertising industry, CRTO is ranked #2 out of 15 stocks.
To access CRTO’s Stability, Quality, and Momentum ratings, click here.
Stock #2: Ziff Davis, Inc. (ZD)
ZD is a digital media and internet company. The company’s offerings include PCMag, Mashable, Spiceworks Ziff Davis, retailMeNot, and Offers.com, among others. It also offers gaming and entertainment content under the IGN Entertainment and Humble Bundle brands.
On January 2, 2025, ZD announced its completion of the acquisition of Cybersecurity and Martech in the fourth quarter of 2024. The acquisition is expected to grow the company's global customer base, provide access to new markets, and expand its portfolio of offerings.
For the fiscal 2024 third quarter that ended September 30, 2024, ZD’s total revenues increased 3.7% year-over-year to $353.58 million. Its adjusted net income and adjusted net income per share grew 4.3% and 9.3% from the prior year's quarter to $72.06 million and $1.64, respectively.
Street expects ZD’s revenue and EPS for the fiscal 2024 fourth quarter, which ended in December 2024, to increase 8.9% and 13% year-over-year to $1.20 billion and $2.63, respectively. Plus, the company has surpassed consensus EPS estimates in three of the four trailing quarters.
Shares of ZD surged 31.4% over the past six months to close the last trading session at $54.28.
ZD’s robust fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
ZD has a B grade for Growth and Value. Within the Advertising industry, it is ranked #5 out of 15 stocks.
In addition to the POWR Rating highlighted above, you can check ZD’s ratings for Momentum, Sentiment, Stability, and Quality here.
Stock #1: PubMatic, Inc. (PUBM)
PUBM is a technology company that provides a cloud infrastructure platform. It enables real-time programmatic advertising transactions for digital content creators, advertisers, agencies, agency trading desks, and demand-side platforms.
On January 22, 2025, PUBM announced a new partnership with TCL, a leading global television brand, to enhance programmatic advertising for live sports. The partnership allows advertisers to leverage the company’s premium inventory and connect with the audience in a more targeted and effective way. This could enhance PUBM’s efficiency and success in sports advertising.
On December 12, 2024, PUBM expanded its partnership with GroupM, WPP's media investment group, to enhance the company's unified programmatic market, GroupM Premium Marketplace, media buying transparency, and efficiency in the LATAM region. This partnership unlocks the immense potential of programmatic advertising as the capability soars in the LATAM region.
For the fiscal 2024 third quarter (ended September 30, 2024), PUBM’s revenue increased 12.7% year-over-year to $71.79 million. Its gross profit rose 23.1% from the year-ago value to $46.28 million. Additionally, the company’s non-GAAP net income and non-GAAP EPS amounted to $5.57 million and $0.12, respectively.
The consensus revenue and EPS estimates of $294.11 million and $0.21 for the fiscal year ended in December 2024 exhibit a year-over-year rise of 10.2% and 29.4%, respectively. Additionally, the company has surpassed consensus EPS estimates in all four trailing quarters, which is noteworthy.
Shares of PUBM have surged 1.8% over the past three months and 18.5% over the past six months to close the last trading session at $16.66.
PUBM’s POWR Ratings reflect its prospects. PUBM has a B grade for Sentiment and Quality.
Within the Software - Application industry, PUBM is ranked #45 out of 128 stocks. Click here to access PUBM’s rating for Momentum, Growth, Stability, and Value.
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CRTO shares were unchanged in premarket trading Wednesday. Year-to-date, CRTO has gained 11.20%, versus a 3.28% rise in the benchmark S&P 500 index during the same period.
About the Author: Aritra_Gangopadhyay
Aritra is a financial journalist dedicated to breaking down complex financial topics into simple, actionable insights. Holding a Master’s degree in Economics, he uses his analytical expertise to help investors uncover unique opportunities for long-term success.
3 Digital Advertising Stocks Capitalizing on the Shift Away from TV StockNews.com
