Why Taboola (TBLA) Shares Are Sliding Today

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Taboola and the best and worst performers in the advertising & marketing services industry.

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 6 advertising & marketing services stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.5% since the latest earnings results.

Best Q3: Taboola

Often appearing as those "You May Also Like" or "Recommended For You" boxes at the bottom of news articles, Taboola 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 $496.8 million, up 14.7% year on year. This print exceeded analysts’ expectations by 6.3%. Overall, it was a stunning quarter for the company with a beat of analysts’ EPS and revenue estimates.

Taboola achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 18.5% since reporting and currently trades at $3.95.

Is now the time to buy Taboola? Access our full analysis of the earnings results here, it’s free for active Edge members.

QuinStreet

Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.

QuinStreet reported revenues of $285.9 million, up 2.4% year on year, outperforming analysts’ expectations by 2.1%. The business had a satisfactory quarter with a solid beat of analysts’ revenue estimates but revenue guidance for next quarter meeting analysts’ expectations.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4.8% since reporting. It currently trades at $13.20.

Is now the time to buy QuinStreet? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Interpublic Group

With a history dating back to 1902 and roots in the McCann-Erickson agency, Interpublic Group 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 $2.14 billion, down 4.8% year on year, falling short of analysts’ expectations by 2.6%. It was a softer quarter as it posted a significant miss of analysts’ revenue estimates.

Interpublic Group delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 1.1% since the results and currently trades at $24.70.

Read our full analysis of Interpublic Group’s results here.

Omnicom Group

With a vast network of creative agencies that helped craft some of the most memorable ad campaigns in history, Omnicom Group 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 $4.04 billion, up 4% year on year. This number met analysts’ expectations. Zooming out, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but organic revenue in line with analysts’ estimates.

The stock is down 8.8% since reporting and currently trades at $71.75.

Read our full, actionable report on Omnicom Group here, it’s free for active Edge members.

Ibotta

Originally launched as a way to make grocery shopping more rewarding for budget-conscious consumers, Ibotta 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 $83.26 million, down 15.6% year on year. This result topped analysts’ expectations by 1.6%. More broadly, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but revenue guidance for next quarter missing analysts’ expectations.

Ibotta had the slowest revenue growth among its peers. The stock is down 24.5% since reporting and currently trades at $24.73.

Read our full, actionable report on Ibotta here, it’s free for active Edge members.