Care.com (NYSE: CRCM) and Leaf Group (NYSE:DMD) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitabiliy and institutional ownership.
Valuation & Earnings
This table compares Care.com and Leaf Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Care.com||$165.85 million||2.68||$7.41 million||($0.04)||-378.41|
Care.com has higher revenue and earnings than Leaf Group. Care.com is trading at a lower price-to-earnings ratio than Leaf Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for Care.com and Leaf Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Care.com currently has a consensus target price of $12.17, suggesting a potential downside of 19.64%. Leaf Group has a consensus target price of $8.50, suggesting a potential upside of 33.86%. Given Leaf Group’s stronger consensus rating and higher possible upside, analysts clearly believe Leaf Group is more favorable than Care.com.
This table compares Care.com and Leaf Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Care.com has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, Leaf Group has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.
Institutional & Insider Ownership
72.1% of Care.com shares are held by institutional investors. Comparatively, 58.8% of Leaf Group shares are held by institutional investors. 24.7% of Care.com shares are held by company insiders. Comparatively, 44.0% of Leaf Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Care.com beats Leaf Group on 7 of the 11 factors compared between the two stocks.
Care.com Company Profile
Care.com, Inc. is an online marketplace for finding and managing family care. As of December 31, 2016, the Company had 22.8 million members, including 12.9 million families and 9.9 million caregivers, spanning 19 countries. Its consumer matching solutions allow families to search for, qualify, vet, connect with and select caregivers. It also provides caregivers with solutions to create personal profiles, describe their skills and experience, and otherwise differentiate and market themselves in a fragmented marketplace. In addition to consumer matching solutions, the Company offers its members products and services to facilitate their interaction with caregivers. It serves employers by providing access to certain of its products and services to employer-sponsored families. In addition, it serves care-related businesses, such as day care centers, nanny agencies and home care agencies, willing to market their services to its care-seeking families and recruit its caregiver members.
Leaf Group Company Profile
Leaf Group Ltd., formerly Demand Media, Inc., is diversified Internet marketplaces and media company. The Company has online media properties and marketplace platforms that enable communities of creators to reach audiences in lifestyle categories. The Company operates an online studio platform for the professional creation and distribution of content, as well as two online artist marketplaces. Its business comprises two service offerings: Content & Media and Marketplaces. The Company creates media content, including text articles, videos, photographs and designed visual formats, and publishes such content to its owned and operated online properties and to its customers’ online properties. The Company also offers its content creation and distribution platform to provide custom content and other content marketing solutions to brands, publishers and advertisers.
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