Analyzing EverQuote (NASDAQ:EVER) and Reddit (NYSE:RDDT)

Reddit (NYSE:RDDT) and EverQuote (NASDAQ:EVER) are both communication services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Insider and Institutional Ownership

91.5% of EverQuote shares are held by institutional investors. 28.5% of Reddit shares are held by company insiders. Comparatively, 23.7% of EverQuote shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Reddit has a beta of 2.02, meaning that its share price is 102% more volatile than the S&P 500. Comparatively, EverQuote has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Profitability

This table compares Reddit and EverQuote’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reddit	31.35%	29.02%	26.32%
EverQuote	15.16%	50.29%	36.69%

Valuation and Earnings

This table compares Reddit and EverQuote”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reddit	$2.20 billion	13.35	$529.72 million	$4.30	35.53
EverQuote	$692.52 million	0.94	$99.31 million	$3.08	5.86

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

Analyst Recommendations

This is a summary of current ratings for Reddit and EverQuote, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	0	12	17	2	2.68
EverQuote	1	1	6	0	2.62

Reddit presently has a consensus target price of $219.29, suggesting a potential upside of 43.53%. EverQuote has a consensus target price of $28.17, suggesting a potential upside of 55.96%. Given EverQuote’s higher probable upside, analysts clearly believe EverQuote is more favorable than Reddit.

Summary

Reddit beats EverQuote on 11 of the 15 factors compared between the two stocks.

About Reddit

Reddit, Inc. operates a website that organizes digital communities. It organizes communities based on specific interests that enable users to engage in conversations by sharing experiences, submitting links, uploading images and videos, and replying to one another. The company was founded in 2005 and is headquartered in San Francisco, California.

About EverQuote

EverQuote, Inc. operates an online marketplace for insurance shopping in the United States. The company offers auto, home and renters, and life insurance. The company serves carriers and agents, as well as indirect distributors. The company was formerly known as AdHarmonics, Inc., and changed its name to EverQuote, Inc. in November 2014. EverQuote, Inc. was incorporated in 2008 and is based in Cambridge, Massachusetts.