What happened

Shares of Criteo (CRTO 3.08%) gained 84.9% in February 2021, according to data from S&P Global Market Intelligence. The online advertising technology specialist rose thanks to a powerful combination of strong earnings and an ongoing strategy shift.

So what

Criteo's stock has been held down since 2017, when it became clear that the leading web browser makers wanted to get away from complicated privacy and security issues around third-party tracking cookies. Criteo and other ad-tracking experts have long relied on this technology to deliver highly targeted ad campaigns to their clients. Share prices rose more than 10% on Feb. 4 amid reports that Criteo would announce a business restructuring and a revamped system of ad tracking technologies.

The company reported analyst-stumping fourth quarter results the next day, pushing stock prices another 24% higher. Besides beating Wall Street's earnings and revenue targets, Criteo also explained how a market-leading treasure trove of client relationships gives the company direct access to the browsing data that feeds the targeted advertising business.

"This data is established through direct and privileged integrations with our retailer clients, enabling cookie-less targeting and retargeting across our commerce media ecosystem," said CEO Megan Clarken on the earnings call.

Hundreds of darts hover at a distance from a single red-and-white dartboard.

Can someone help us target these ads? Image source: Getty Images.

Now what

Stocks that see their share prices nearly double in a single month often end up trading at nosebleed-worthy valuation ratios. Criteo is a different story. The stock looks downright cheap at 14 times free cash flows and 16 times forward earnings. The third-party cookie calamity that was supposed to doom this company turned out to be a paper tiger.

Locking in my own Criteo profits at these prices would be a terrible mistake because there's a lot of growth left to explore in Criteo's corner of the digital advertising sector.