Critical Survey: Direct Digital (NASDAQ:DRCT) vs. X3 (NASDAQ:XTKG)

X3 (NASDAQ:XTKG) and Direct Digital (NASDAQ:DRCT) are both small-cap business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Risk & Volatility

X3 has a beta of 1.77, meaning that its stock price is 77% more volatile than the S&P 500. Comparatively, Direct Digital has a beta of 6.09, meaning that its stock price is 509% more volatile than the S&P 500.

Institutional & Insider Ownership

1.9% of X3 shares are held by institutional investors. Comparatively, 4.0% of Direct Digital shares are held by institutional investors. 23.9% of X3 shares are held by company insiders. Comparatively, 25.6% of Direct Digital shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares X3 and Direct Digital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
X3	N/A	N/A	N/A
Direct Digital	-26.76%	N/A	-39.57%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for X3 and Direct Digital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
X3	1	0	0	0	1.00
Direct Digital	1	1	1	0	2.00

Direct Digital has a consensus target price of $330.00, suggesting a potential upside of 40,390.80%. Given Direct Digital’s stronger consensus rating and higher possible upside, analysts plainly believe Direct Digital is more favorable than X3.

Earnings & Valuation

This table compares X3 and Direct Digital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
X3	$11.61 million	0.09	-$76.24 million	N/A	N/A
Direct Digital	$62.29 million	0.01	-$6.24 million	($74.73)	-0.01

Direct Digital has higher revenue and earnings than X3.

Summary

Direct Digital beats X3 on 8 of the 11 factors compared between the two stocks.

About X3

X3 Holdings Co Ltd. provides technology solutions and services worldwide. The company offers Global Trade Platform, a digital platform for trading partners, service providers, and government authorities. It also engages in bitcoin cryptomining operations, renewable energy projects, and agriculture technologies and trading. The company was formerly known as Powerbridge Technologies Co., Ltd. and changed its name to X3 Holdings Co Ltd. in January 2024. X3 Holdings Co Ltd. was founded in 1997 and is headquartered in Singapore.

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.