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Looking back on advertising & marketing services stocks’ Q4 earnings, we examine this quarter’s best and worst performers, including Ibotta (NYSE:IBTA) and its peers.
The sector is on the precipice of both disruption and growth as AI, programmatic advertising, and data-driven marketing reshape how things are done. For example, the advent of the Internet broadly and programmatic advertising specifically means that brand building is not a relationship business anymore but instead one based on data and technology, which could hurt traditional ad agencies. On the other hand, the companies in the sector that beef up their tech chops by automating the buying of ad inventory or facilitating omnichannel marketing, for example, stand to benefit. With or without advances in digitization and AI, the sector is still highly levered to the macro, and economic uncertainty may lead to fluctuating ad spend, particularly in cyclical industries.
The 7 advertising & marketing services stocks we track reported a slower Q4. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was signficantly above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 20.9% since the latest earnings results.
Ibotta (NYSE:IBTA)
Originally launched as a way to make grocery shopping more rewarding for budget-conscious consumers, Ibotta (NYSE:IBTA) is a mobile shopping app that allows consumers to earn cash back on everyday purchases by completing tasks and submitting receipts.
Ibotta reported revenues of $98.38 million, flat year on year. This print fell short of analysts’ expectations by 5.1%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates.
“2024 was a year of significant growth and change for Ibotta,” said Ibotta CEO and founder, Bryan Leach.
Ibotta Total Revenue
The stock is down 26.5% since reporting and currently trades at $46.32.
Operating across the United States, Liberty Broadband (NASDAQ:LBRDK) is a provider of high-speed internet, cable television, and telecommunications services across various markets.
Liberty Broadband reported revenues of $263 million, up 5.2% year on year, outperforming analysts’ expectations by 4.2%. The business had a stunning quarter with a solid beat of analysts’ EPS estimates.
Liberty Broadband Total Revenue
The stock is down 7.7% since reporting. It currently trades at $75.01.
Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ:MGNI) operates the world's largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.
Magnite reported revenues of $194 million, up 3.8% year on year, falling short of analysts’ expectations by 6.1%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
Magnite delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 31.8% since the results and currently trades at $11.49.
With a vast network of creative agencies that helped craft some of the most memorable ad campaigns in history, Omnicom Group (NYSE:OMC) is a strategic holding company that provides advertising, marketing, and communications services to many of the world's largest companies.
Omnicom Group reported revenues of $4.32 billion, up 6.4% year on year. This number met analysts’ expectations. More broadly, it was a mixed quarter as it failed to impress in some other areas of the business.
The stock is down 10.7% since reporting and currently trades at $77.60.
Often appearing as those "You May Also Like" or "Recommended For You" boxes at the bottom of news articles, Taboola (NASDAQ:TBLA) operates a digital platform that recommends personalized content to users across publisher websites, helping both publishers monetize their sites and advertisers reach target audiences.
Taboola reported revenues of $212.7 million, up 26.2% year on year. This result came in 0.7% below analysts' expectations. Zooming out, it was actually a strong quarter as it recorded an impressive beat of analysts’ EPS estimates and revenue guidance for next quarter exceeding analysts’ expectations.
Taboola had the weakest full-year guidance update among its peers. The stock is down 23.2% since reporting and currently trades at $2.85.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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