Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at QuinStreet (NASDAQ:QNST) 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 strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 0.8% below.
In light of this news, share prices of the companies have held steady as they are up 3.7% on average since the latest earnings results.
QuinStreet (NASDAQ:QNST)
Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet (NASDAQ:QNST) operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.
QuinStreet reported revenues of $269.8 million, up 60.1% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a decent beat of analysts’ EPS estimates.
“We delivered strong results again in the March quarter, our fiscal Q3, growing revenue 60% year-over-year, and adjusted EBITDA 145%,” commented Doug Valenti, CEO of QuinStreet.
QuinStreet pulled off the fastest revenue growth of the whole group. Still, the market seems discontent with the results. The stock is down 0.6% since reporting and currently trades at $15.75.
Is now the time to buy QuinStreet? Access our full analysis of the earnings results here, it’s free.
Best Q1: Liberty Broadband (NASDAQ:LBRDK)
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 $266 million, up 8.6% year on year, outperforming analysts’ expectations by 7.2%. The business had an incredible quarter.
Liberty Broadband delivered the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $93.01.
Is now the time to buy Liberty Broadband? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Omnicom Group (NYSE:OMC)
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 $3.69 billion, up 1.6% year on year, falling short of analysts’ expectations by 0.6%. It was a mixed quarter as it posted a decent beat of analysts’ EPS estimates but organic revenue in line with analysts’ estimates.
As expected, the stock is down 8.7% since the results and currently trades at $70.22.
Read our full analysis of Omnicom Group’s results here.
Magnite (NASDAQ:MGNI)
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 $155.8 million, up 4.3% year on year. This print came in 2.6% below analysts' expectations. In spite of that, it was a satisfactory quarter as it put up an impressive beat of analysts’ EPS estimates.
Magnite had the weakest performance against analyst estimates among its peers. The stock is up 40.9% since reporting and currently trades at $17.56.
Read our full, actionable report on Magnite here, it’s free.
Interpublic Group (NYSE:IPG)
With a history dating back to 1902 and roots in the McCann-Erickson agency, Interpublic Group (NYSE:IPG) is a marketing and communications holding company that owns agencies specializing in advertising, media buying, public relations, and digital marketing services.
Interpublic Group reported revenues of $2.00 billion, down 8.5% year on year. This result was in line with analysts’ expectations. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ EPS estimates and a narrow beat of analysts’ organic revenue estimates.
Interpublic Group had the slowest revenue growth among its peers. The stock is down 1.8% since reporting and currently trades at $23.51.
Read our full, actionable report on Interpublic Group here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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