Analyzing Direct Digital (NASDAQ:DRCT) and Liberty Media Corporation – Liberty Formula One Series C (NASDAQ:FWONK)

Liberty Media Corporation – Liberty Formula One Series C (NASDAQ:FWONK) and Direct Digital (NASDAQ:DRCT) are both communication services companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Liberty Media Corporation – Liberty Formula One Series C and Direct Digital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Liberty Media Corporation – Liberty Formula One Series C	0	3	5	0	2.62
Direct Digital	1	0	0	0	1.00

Liberty Media Corporation – Liberty Formula One Series C currently has a consensus target price of $117.57, suggesting a potential upside of 23.66%. Given Liberty Media Corporation – Liberty Formula One Series C’s stronger consensus rating and higher possible upside, research analysts plainly believe Liberty Media Corporation – Liberty Formula One Series C is more favorable than Direct Digital.

Volatility and Risk

Liberty Media Corporation – Liberty Formula One Series C has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Direct Digital has a beta of 5.3, meaning that its share price is 430% more volatile than the S&P 500.

Profitability

This table compares Liberty Media Corporation – Liberty Formula One Series C and Direct Digital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Liberty Media Corporation – Liberty Formula One Series C	N/A	N/A	N/A
Direct Digital	-74.38%	N/A	-68.48%

Valuation and Earnings

This table compares Liberty Media Corporation – Liberty Formula One Series C and Direct Digital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Liberty Media Corporation – Liberty Formula One Series C	$4.48 billion	4.76	$152.55 million	$0.68	139.82
Direct Digital	$34.69 million	0.04	-$18.95 million	($156.85)	-0.01

Liberty Media Corporation – Liberty Formula One Series C has higher revenue and earnings than Direct Digital. Direct Digital is trading at a lower price-to-earnings ratio than Liberty Media Corporation – Liberty Formula One Series C, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

92.3% of Liberty Media Corporation – Liberty Formula One Series C shares are owned by institutional investors. Comparatively, 4.0% of Direct Digital shares are owned by institutional investors. 4.3% of Liberty Media Corporation – Liberty Formula One Series C shares are owned by company insiders. Comparatively, 25.6% of Direct Digital 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.

Summary

Liberty Media Corporation – Liberty Formula One Series C beats Direct Digital on 11 of the 13 factors compared between the two stocks.

About Liberty Media Corporation – Liberty Formula One Series C

Formula One Group, through its subsidiary Formula 1, engages in the motorsports business in the United States and internationally. The company holds commercial rights for the FIA Formula One world championship, approximately a nine-month long motor race-based competition in which teams compete for the constructors' championship and drivers compete for the drivers' championship. It is also involved in the operation of the Formula 1 Paddock Club hospitality program; and provision of freight, logistical, and travel related services for the teams and other third parties, as well as the F2 and F3 race series. The company was founded in 1950 and is based in Englewood, Colorado. Formula One Group operates as a subsidiary of Liberty Media Corporation.

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.