4 Ad Stocks to Buy Now

The increasing adoption of digital advertising and technological developments in artificial intelligence across developing countries is accelerating the growth of the advertising market. So, we think advertising stocks Publicis Groupe (PUBGY), Criteo (CRTO), Cimpress plc (CMPR), and Tremor (TRMR) could be solid bets now. Read on.

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While the fast-paced economic recovery is feeding the advertising operations of recovering businesses, the advertising sector has witnessed steady growth. In addition, as consumers spend more time at home and consume more digital content, there has been a significant increase in the use of e-commerce and social media, driving the growth of digital advertising.

Driven by rapid technological advances, increasing urbanization, increasing adoption of 5G networks, and IoT, the global digital advertising market is projected to reach $1,065.8 billion in 2031, growing at a CAGR of 10.3%.

Therefore, we think it’s best to invest in the fundamentally sound advertising stock Publicis Groupe SA (PUBG), Criteo SA (CRTO), Cimpress plc (CMPR), and Tremor International Ltd (TRMR) to cash in on industrial towing.

Publicis Groupe SA (PUBG)

Headquartered in Paris, France, PUBGY offers value chain communication, consulting, execution, marketing and digital business transformation services. It serves as an advertising agency offering billboard, television, radio and press advertising services under the brands Publicis Worldwide, Saatchi & Saatchi, Leo Burnett, Marcel, Fallon, and BBH.

In January, PUBGY announced the acquisition of Tremend, one of the fastest growing and largest independent software engineering companies in Central and Eastern Europe. Tremend will serve as the newest global delivery hub for Publicis Sapient. Its proven technology has reached its 60 million client end users. The acquisition of Tremend should be a strong extension of PUBG’s global distributed delivery model and engineering capabilities and diversify its geographic footprint.

Last December, PUBGY announced the launch of Southeast Asia’s largest fintech entity, SCB Tech X, a joint venture between Publicis Sapient and Siam Commercial Bank (SCB). SCB Tech X is a trusted, cloud-native industry-leading platform-as-a-service business that will serve clients across Southeast Asia where digital payments are expected to exceed US$1 trillion in transaction value by 2025.

PUBGY’s revenue increased 8.8% year-on-year to €11.74 billion ($13 billion) for fiscal 2021. Its operating income grew 45.9% from the previous quarter to €1.43 billion ($1.58 billion). And the company’s net profit jumped 81.4% from last year’s value to €1.03 billion ($1.14 billion), while its EPS grew 17.6% year-on-year to €5.02.

Analysts expect PUBGY revenue to increase 5.5% year-over-year to $12.64 billion in fiscal 2022. The consensus EPS forecast of $1.51 represents 6.4% year-on-year growth in fiscal 2022.

PUBG POWRA Rating reflects this promising view. The company has an overall B rating, which means Buy in our proprietary rating system. The POWR rating values ​​stocks based on 118 different factors, each with its own weight.

PUBGY also rates it B for Stability. In Advertising industry, it ranks #5 out of 20 stocks.

Beyond what we’ve stated above, we’ve also rated PUBGY for Growth, Value, Quality, Momentum and Sentiment. Get all PUBGY ratings here.

Criteo SA (CRTO)

Headquartered in Paris, France, CRTO provides marketing and monetization services on the open Internet in the Americas, Europe, Middle East, Africa and Asia-Pacific. The company’s Criteo Shopper Graph obtains clients’ trading data, such as transaction activity on their digital properties. Criteo AI engine solutions include lookalike search, recommendations, and predictive bidding algorithms.

Last month, CRTO announced a retail media advertising partnership with Michaels, North America’s leading specialty arts and crafts retailer. Brands and agencies connected to the CRTO retail media platform and ecosystem can attract Michaels’ loyal customer base, enhance the shopping experience and explore relevant products through uninterrupted advertising, while driving new revenue streams for retailers.

Last December, CRTO announced its strategic acquisition of IPONWEB, a market-leading AdTech company with world-class media trading capabilities. This acquisition should enable CRTO to accelerate the Commerce Media Platform’s vision to give enterprise marketers and their agency partners better control by leveraging IPONWEB’s established DSP and SSP solutions.

In the fourth quarter, ending December 31, 2021, CRTO’s revenue totaled $653 million. Its operating income was $65.74 million, while its net profit increased 60% year over year to $74.94. The company’s EPS increased 57.5% year over year to $1.15.

The consensus EPS forecast for the third quarter ended March 31, 2022, shows a 9.1% year-over-year increase to $0.70. Analysts expect its revenue to increase 3.1% year-on-year to $220.00 million for the first quarter, ending March 31, 2022. In addition, it has an impressive history of earnings surprises; it topped consensus EPS forecasts in all the last four quarters.

CRTO’s strong fundamentals are reflected in its POWR Rating. The stock has an overall B rating, which is equivalent to Buy in our POWR Rating system. Stock also has a B for Value and Quality. In Advertising industry, it ranks #3.

In total, we assessed CRTO at eight different levels. Beyond what we have stated above, we have also assigned CRTO values ​​for Growth, Stability, Momentum and Sentiment. Get all CRTO ratings here.

Cimpress plc (CMPR)

CMPR offers a wide range of mass customization services worldwide and has five operational segments: Vistaprint; PrintBrother; Printing Group; National Pen; and All Other Businesses. It also provides print and digital marketing products, internet-based printed canvas wall decor, business signage and other printed products. CMPR is headquartered in Dundalk, Ireland.

For the second quarter, ending December 31, 2021, CMPR’s net sales increased 8.8% year-on-year to $849.72 million. Its operating income was $85.98 million, while its net profit increased 65.6% from the previous quarter to $56.15 million. The company’s EPS rose 70.5% year-on-year to $2.08.

CMPR is expected to generate $647.70 million in revenue. representing 11.9% year-on-year growth in the third quarter, ending March 31, 2022.

CMPR’s POWR rating reflects this promising outlook. The company has an overall B rating, which means Buy in our proprietary rating system. CMPT is also rated A for Quality and B for Value and Sentiment. In Advertising industry, it ranks #1.

Click here to view additional POWR Ratings for Growth, Stability and Momentum for CMPR.

Tremors International Ltd (TRMR)

Headquartered in Tel Aviv-Yafo, Israel, TRMR provides an end-to-end software platform that helps advertisers reach relevant audiences and publishers. The company’s demand-side platform (DSP) offers full-service and self-managed market access to advertisers and agencies to implement their digital marketing campaigns in real-time across multiple ad formats.

Last month, TRMR announced the scale-up of its data-driven TV Intelligence solution. With the help of new partnerships signed in recent months, the national footprint of TV Intelligence solutions reaches 44 million US households with a more comprehensive and representative data set sourced from smart TVs and eighteen MVPD providers.

In the second fiscal quarter, ending December 31, 2021, TRMR’s ​​net sales increased 25.8% year-on-year to $102.53 million. That gross profit increased 31.1% from last year’s value to $77.79 million, while net profit grew 15.2% from the previous year’s quarter to $24.4 million. The company’s non-IFRS EPS increased 35% year over year to $0.27.

The consensus EPS estimate of $0.25 for the third quarter, ending September 30, 2022, represents a 16.7% year-over-year increase. Analysts expect earnings to grow 56.1% year-on-year to $93.88 million for the second quarter, ending June 30, 2022. The share price has risen 88.9% over the past year and 7.4% over the past month.

It’s no surprise that TRMR has an overall B rating, which is the equivalent of Buy in our POWR Rating system. Stocks also have an A for Sentiment and B for Quality. In Advertising industry, it ranks #4.

Click here to view additional POWR Ratings for TRMR (Growth, Stability, Value and Momentum).

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PUBGY shares were trading at $13.79 a share as of Friday morning, down $0.78 (-5.35%). This year, PUBGY has fallen -18.40%, compared to the -9.62% gain in the benchmark S&P 500 index over the same period.

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About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college he majored in finance and is currently pursuing a CFA program and is a Level II candidate.

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