With the evolving technologies and efficiency, advertisement processes and methods have evolved substantially. Most of the advertising has shifted to digital platforms, where social media plays a key role along with mobile advertising and programmatic marketing.

Given the industry’s bright prospects, fundamentally sound digital advertising stocks Ziff Davis, Inc. (ZD), Criteo S.A. (CRTO), and PubMatic, Inc. (PUBM) could be ideal investments for potential gains.

Advertisements have evolved exponentially in recent decades, from physically distributable copies to digital prints and technologically advanced modes; various factors have shaped the industry. Further, the rising prevalence of digital platforms like social media, search engines, mobile apps, and websites has offered significant potential to the industry.

Businesses increasingly leverage digital channels to reach a wider population, promote their marketplace, products, and services, and enhance brand visibility. Statista projects ad spending in the advertising market worldwide to reach $1.16 trillion in 2025, where TV & video advertising is expected to emerge as the largest market, reaching $353.90 billion in the same year.

Increasing internet penetration, growing smartphone usage, and easy access have resulted in more consumers turning to online platforms for information and entertainment, driving the digital advertising market. In the digital arena, innovative strategies, data analytics, and the realm of social media advertising and influencer partnerships are creating new avenues.

The digital advertising market is projected to grow from $1.01 trillion in 2025 to $2.03 trillion by 2034, exhibiting a CAGR of 8.2%.

Considering these encouraging industry trends, let us dig deeper into the fundamentals of the leading digital advertising stocks such as ZD, CRTO, and PUBM:

Ziff Davis, Inc. (ZD)

ZD operates internationally as a digital media and internet company. It offers PCMag, Mashable, Spiceworks Ziff Davis, retailMeNot, Offers.com, and event-based properties, including BlackFriday.com, TheBlackFriday.com, BestBlackFriday.com, and DealsofAmerica.com.

ZD’s trailing-12-month gross profit margin of 85.38% is 61.7% higher than the industry average of 52.80%. Its trailing-12-month EBITDA margin of 30.64% is significantly higher than the industry average of 18.75%. Further, the stock’s trailing-12-month net income margin of 4.52% is 19.5% higher than the 3.79% industry average.

During the third quarter that ended September 30, 2024, ZD’s total revenues increased 3.7% year-over-year to $353.58 million. The company’s adjusted net income stood at $72.06 million or $1.64 per share, reflecting growth of 4.3% and 9.3% over the prior year’s quarter, respectively.

Also, its adjusted EBITDA grew 9.6% from the year-ago value to $124.69 million. The company’s free cash flow was $80.12 million, up 75.8% year-over-year.

Analysts expect ZD’s EPS for the fourth quarter (ended December 2024) to increase 13% year-over-year to $2.63. The consensus revenue estimate of $424.40 million for the same quarter indicates an 8.9% rise year-over-year. Moreover, the company surpassed the consensus EPS estimates in three of the trailing four quarters.

ZD’s stock has gained 8.3% over the past six months to close the last trading session at $52.65.

ZD’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

ZD’s stock has a B grade for Growth and Value. Within the Advertising industry, ZD is ranked #4 of 14 stocks.

Click here to access additional ratings of ZD for Quality, Momentum, Stability, and Sentiment.

Criteo S.A. (CRTO)

Headquartered in Paris, France, CRTO is a technology company offering marketing and monetization services on the open Internet internationally. The company provides Criteo Shopper Graph, which derives clients’ proprietary commerce data, such as transaction activity on their digital properties, and Criteo AI Engine 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 collaborations aim at integrations to provide Criteo retailer clients with increased flexibility when building, managing, and scaling their retail media networks.

In the third quarter that ended September 30, 2024, CRTO reported revenue of $458.89 million. The company’s gross profit increased 13.1% year-over-year to $231.93 million. In addition, net income available to shareholders of Criteo S.A. were $6.25 million and $0.11 per share for the quarter, respectively.

Furthermore, the company’s adjusted EBITDA of $82 million indicates an increase of 19.8% from the prior year’s quarter.

As per the fiscal year 2024 guidance, CRTO expects an adjusted EBITDA margin of approximately 32% to 33% of contribution ex-TAC for the full year.

The company expects adjusted EBITDA between $114 million and $120 million for the fourth quarter.

Street expects CRTO’s revenue for the fiscal year (ended December 2024) to increase 9.4% year-over-year to $1.12 billion. For the same year, its EPS is expected to increase 31.4% year-over-year to $4.18. Also, the company has topped consensus EPS estimates in all four trailing quarters.

Shares of CRTO have surged 54% over the past year to close the last trading session at $37.23.

CRTO’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

CRTO has an A grade for Value. It is ranked #5 out of 14 stocks in the Advertising industry.

In addition to the POWR Ratings we’ve stated above, we also have CRTO ratings for Growth, Momentum, Sentiment, Quality, and Stability. Get all CRTO ratings here.

PubMatic, Inc. (PUBM)

PUBM engages in the provision of a cloud infrastructure platform that allows real-time programmatic advertising transactions for digital content creators, advertisers, agencies, agency trading desks, and demand side platforms globally.

On January 7, 2025, PUBM and KERV.ai, a leader in video analysis, performance, and monetization, announced a strategic partnership that allows marketers to layer KERV’s portfolio of AI-powered interactive and shoppable video capabilities across PubMatic’s premium inventory.

Through the collaboration, advertisers will gain enhanced access to KERV’s AI-powered interactive and shoppable video ads through PUBM’s Premium omnichannel inventory.

On December 3, 2024, PUBM expanded its collaboration with Western Union to unlock new commerce media opportunities with the inclusion of its commerce media business. The expanded partnership will leverage PUBM’s leading Sell-Side Platform (SSP) capabilities to enhance onsite monetization with Western Union’s rich first-party data for offsite audience extension via Convert.

It will allow advertisers to target Western Union’s globally diverse audiences with highly relevant messages across brand-safe, premium digital channels.

On November 22, 2024, PUBM and DIGITS, a leading independent retail media agency, entered into a strategic partnership to leverage PUBM’s Convert, a scalable full-funnel commerce media platform, to monetize digital grocery advertising inventory and audiences programmatically with omnichannel, closed-loop reporting.

PUBM’s revenue increased 12.7% year-over-year to $71.79 million during the third quarter that ended September 30, 2024. The company’s gross profit of $46.28 million reflects growth of 23.1% year-over-year. Its adjusted EBITDA grew 1.7% from the year-ago value to $18.55 million. Also, the company’s non-GAAP net income and EPS came in at $6.57 million or $0.12 for the quarter, respectively.

Analysts expect PUBM’s revenue and EPS for the fiscal year (ended December 2024) to increase 10.2% and 29.4% year-over-year to $294.25 million and $0.21, respectively. Further, the company has surpassed the consensus EPS estimates in each of the trailing four quarters.

Over the past year, the stock has slumped 1.5% to close the last trading session at $14.

PUBM’s POWR Ratings reflect its bright prospects. The stock has an overall grade of B, translating to a Buy in our proprietary rating system.

PUBM has a B grade for Sentiment and Quality. It is ranked #42 among 124 stocks within the B-rated Software – Application industry.

To see the other ratings of PUBM for Growth, Momentum, Value, and Stability, click here.

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ZD shares were trading at $53.38 per share on Wednesday afternoon, up $0.73 (+1.39%). Year-to-date, ZD has declined -1.77%, versus a 1.02% rise in the benchmark S&P 500 index during the same period.

About the Author: Rjkumari Saxena

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions. More...

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