3 Digital Marketing Stocks to Add to Your Portfolio in 2022

The digital marketing industry has flourished since the onset of the COVID-19 pandemic, with the opening of several new online businesses. The industry has maintained its growth momentum and is predicted to keep surging with the changing business landscape in the coming years. Most companies rely heavily on search engines and social media platforms to boost their sales, which will drive the digital marketing industry’s growth.

Being cost-effective and convenient, digital advertising is expected to dominate the advertising space in the coming years. According to a Market Watch report, the Global Digital Advertising Market is expected to grow at a 19.5% CAGR through 2030.

So, we think it may be wise to bet now on fundamentally strong digital marketing stocks Thryv Holdings, Inc. (THRY), AcuityAds Holdings Inc. (ATY), and Townsquare Media, Inc. (TSQ).

Click here to check out our Software Industry Report 

Thryv Holdings, Inc. (THRY)

THRY in Dallas, Tex., provides digital marketing solutions and cloud-based tools to small- and medium-sized businesses (SMBs) in the United States. The company operates through three segments: SaaS (Software as a Service), Marketing Services, and Thryv International.

On November 11, 2021, Joe Walsh, CEO, and president of THRY said, “We are experiencing the modernization of the local economy with SMB's beginning to embrace cloud technologies, and we see Thryv as leading the charge. This wave of adoption has propelled Thryv software to faster and faster growth.”

THRY’s revenue increased 23.7% year-over-year to $297.29 million in the third quarter, ended September 30, 2021. Its SaaS revenue came in at $44.80 million, up 40.8% year-over-year. Furthermore, its comprehensive income came in at $31.52 million, compared to a $145,000 loss in the previous period.

Analysts expect THRY’s revenue to increase to $1.10 billion in its fiscal year 2021. Its EPS is expected to come in at $2.60 in the current year. In addition, it has surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past nine months, the stock has gained 72.9% in price to close yesterday’s trading session at $39.74.

THRY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

THRY has a B grade for Value. Within the Software - Business industry, THRY is ranked #12 out of 63 stocks. Click here to see the additional POWR Ratings for Sentiment, Momentum, Growth, Quality, and Stability for THRY.

AcuityAds Holdings Inc. (ATY)

Based in Toronto, Canada, ATY, a technology company, provides digital media solutions. It serves Fortune 500 enterprises and small- to mid-sized businesses in the United States, Canada, Europe, the Middle East, and Africa.

On November 3, 2021, Tal Hayek, Co-Founder and CEO of ATY, said, “As we look to the fourth quarter, based on our current pipeline, we expect to generate year-over-year total revenue growth and strong adjusted EBITDA.”

For the fiscal third quarter, ended September 30, 2021, ATY’s managed services revenue increased 3% year-over-year to CAD19.32 million ($15.06 million). The company’s net income came in at CAD3.36 million ($2.62 million), up 265% year-over-year, and its EPS increased 200% year-over-year to CAD$0.06.

ATY’s revenue is expected to be $113.39 million in its fiscal year 2022, representing a 20.7% year-over-year rise. The company’s EPS is expected to increase 178.9% year-over-year to $0.15 in its fiscal 2021. Also, it surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past month, the stock has gained 3.3% in price to close yesterday’s trading session at $3.77.

It is no surprise that ATY has an A grade for Value and a B grade for Quality. ATY is ranked #6 of 18 stocks in the Advertising industry. Click here to see the additional POWR Ratings for ATY (Stability, Sentiment, Growth, and Momentum).

Townsquare Media, Inc. (TSQ)

TSQ operates as a radio, digital media, entertainment, and digital marketing solutions company in small- and mid-sized markets. The Greenwich, Conn.-based concern  operates through Advertising; Townsquare Interactive; and Live Events segments.

On November 2, 2021, Bill Wilson, CEO, TSQ, said, “I am incredibly proud of the Townsquare Team and the results we have delivered to date, which sets us up to noticeably exceed 2019’s Adjusted EBITDA in FY 2021, marking a record profit level for our company. Although COVID is far from over, we have been able to achieve our revenue and EBITDA targets faster than we had initially planned for while gaining market share.”

TSQ’s net revenue increased 16.7% year-over-year to $111.28 million for its fiscal third quarter, ended September 30, 2021. Its net income came in at $12.89 million, up 883.5% year-over-year, and its EPS increased 2,033.3% year-over-year to $0.64.

For its fiscal 2021, TSQ’s revenue is expected to grow 12.3% to $417.01 million. Its EPS is estimated to reach $1.55, growing at the rate of 453.6% in the current year. Over the past year, the stock has gained 94.9% in price to close the trading session at $12.96.

TSQ’s strong fundamentals are reflected in its POWR ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.

In addition, it has an A grade for Sentiment and a B grade for Growth, Value, and Momentum. TSQ is ranked #1 of 5 stocks in the Entertainment - Radio industry. Click here to see TSQ’s ratings for Stability and Quality.

THRY shares were trading at $41.41 per share on Monday afternoon, up $1.67 (+4.20%). Year-to-date, THRY has gained 206.74%, versus a 29.01% rise in the benchmark S&P 500 index during the same period.

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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