Critical Analysis: System1 (NYSE:SST) vs. Bumble (NASDAQ:BMBL)

System1 (NYSE:SST) and Bumble (NASDAQ:BMBL) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.

Earnings and Valuation

This table compares System1 and Bumble’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
System1	$401.97 million	0.31	-$227.22 million	($2.27)	-0.61
Bumble	$1.05 billion	1.10	-$4.21 million	$0.17	53.94

Bumble has higher revenue and earnings than System1. System1 is trading at a lower price-to-earnings ratio than Bumble, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

System1 has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Bumble has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for System1 and Bumble, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
System1	0	1	1	0	2.50
Bumble	0	5	12	0	2.71

System1 presently has a consensus target price of $3.50, suggesting a potential upside of 153.62%. Bumble has a consensus target price of $15.14, suggesting a potential upside of 65.05%. Given System1’s higher probable upside, equities research analysts plainly believe System1 is more favorable than Bumble.

Insider & Institutional Ownership

87.5% of System1 shares are held by institutional investors. Comparatively, 94.9% of Bumble shares are held by institutional investors. 28.3% of System1 shares are held by insiders. Comparatively, 7.8% of Bumble shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares System1 and Bumble’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
System1	-49.23%	-42.08%	-12.99%
Bumble	2.04%	0.92%	0.60%

Summary

Bumble beats System1 on 12 of the 14 factors compared between the two stocks.

About System1

System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.

About Bumble

Bumble Inc. provides online dating and social networking platforms in North America, Europe, internationally. It owns and operates websites and applications that offers subscription and in-app purchases dating products. The company operates apps, including Bumble, a dating app built with women at the center, where women make the first move; Badoo, the web and mobile free-to-use dating app; Official app where users connect their profile with that of their partner enabling a shared, linked product experience; Bumble BFF and Bumble Bizz Modes that have a format similar to the date mode requiring users to set up profiles and matching users through yes and no votes, similar to the dating platform; and Bumble for Friends, a friendship app where people in all stages of life can meet people nearby and create meaningful platonic connections, as well as Fruitz app is centered around encouraging honesty and transparency by sharing dating intentions from the first touch point. Bumble Inc. was founded in 2006 in and is headquartered in Austin, Texas.