Critical Analysis: EverCommerce (NASDAQ:EVCM) versus Nextdoor (NYSE:KIND)

Nextdoor (NYSE:KIND) and EverCommerce (NASDAQ:EVCM) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Institutional & Insider Ownership

35.7% of Nextdoor shares are held by institutional investors. Comparatively, 97.9% of EverCommerce shares are held by institutional investors. 33.4% of Nextdoor shares are held by company insiders. Comparatively, 10.4% of EverCommerce 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 Nextdoor and EverCommerce’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nextdoor	-36.95%	-15.75%	-13.84%
EverCommerce	2.99%	2.49%	1.30%

Volatility and Risk

Nextdoor has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, EverCommerce has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Nextdoor and EverCommerce, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nextdoor	1	2	0	0	1.67
EverCommerce	2	6	2	0	2.00

Nextdoor currently has a consensus price target of $1.62, indicating a potential upside of 17.15%. EverCommerce has a consensus price target of $10.71, indicating a potential downside of 5.68%. Given Nextdoor’s higher possible upside, equities analysts clearly believe Nextdoor is more favorable than EverCommerce.

Earnings and Valuation

This table compares Nextdoor and EverCommerce”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nextdoor	$248.31 million	2.13	-$98.06 million	($0.24)	-5.75
EverCommerce	$588.91 million	3.43	$17.60 million	$0.09	126.22

EverCommerce has higher revenue and earnings than Nextdoor. Nextdoor is trading at a lower price-to-earnings ratio than EverCommerce, indicating that it is currently the more affordable of the two stocks.

Summary

EverCommerce beats Nextdoor on 11 of the 14 factors compared between the two stocks.

About Nextdoor

Nextdoor Holdings, Inc. operates a neighborhood network that connects neighbors, businesses, and public services in the United States and internationally. The company enables neighbors and organizations to get information, give and get help, and build connections. It also offers advertising solutions, designs to generate value for businesses for connection and sales expansion. The company is headquartered in San Francisco, California.

About EverCommerce

EverCommerce Inc., together with its subsidiaries, provides integrated software-as-a-service solutions for service-based small and medium sized businesses in the United States and internationally. The company’s solutions include business management software that offers route-based dispatching, medical practice management, and gym member management solutions; billing and payment solutions comprising e-invoicing, mobile payments, and integrated payment processing; customer experience solution, which include reputation management and messaging solutions; and marketing technology solutions that cover websites, hosting, and digital lead generation. It also provides EverPro suite of solutions in home services; EverHealth suite of solutions within health services; and EverWell suite of solutions in fitness and wellness services. In addition, the company offers professional services, such as implementation, configuration, installation, or training services. It serves home service professionals, including home improvement contractors and home maintenance technicians; physician practices and therapists in the health services industry; and personal trainers and salon owners in the fitness and wellness sectors. The company was formerly known as PaySimple Holdings, Inc. and changed its name to EverCommerce Inc. in December 2020. EverCommerce Inc. was incorporated in 2016 and is headquartered in Denver, Colorado.