Yelp (NYSE: YELP) and Tucows (NASDAQ:TCX) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Valuation & Earnings

This table compares Yelp and Tucows’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Yelp $787.22 million 4.34 $43.09 million $0.15 278.73
Tucows $251.66 million 2.20 $29.37 million $1.43 36.68

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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yelp 0 16 17 0 2.52
Tucows 0 0 1 0 3.00

Yelp presently has a consensus target price of $37.91, indicating a potential downside of 9.33%. Tucows has a consensus target price of $36.00, indicating a potential downside of 31.36%. Given Yelp’s higher possible upside, equities research analysts clearly believe Yelp is more favorable than Tucows.

Risk & Volatility

Yelp has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, Tucows has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Institutional and Insider Ownership

95.4% of Yelp shares are held by institutional investors. Comparatively, 36.5% of Tucows shares are held by institutional investors. 10.1% of Yelp shares are held by company insiders. Comparatively, 13.2% of Tucows shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Yelp and Tucows’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yelp 1.67% 1.60% 1.45%
Tucows 6.06% 41.65% 6.52%

Summary

Yelp beats Tucows on 8 of the 14 factors compared between the two stocks.

Yelp Company Profile

Yelp Inc. (Yelp) connects people with local businesses by bringing ‘word of mouth’ online and providing a platform for businesses and consumers to engage and transact. The Company offers local business review sites. Yelp provides a platform for consumers to share their everyday local business experiences with other consumers by posting reviews, tips, photos and videos, and to engage directly with businesses, through reviews, its Request-A-Quote and Message the Business features, and by completing transactions on the Yelp Platform. Yelp also provides businesses of all sizes with a range of free and paid services that help them engage with consumers. The Yelp Platform allows consumers to transact with local businesses directly on Yelp through Yelp Eat24, the food ordering and delivery business; Yelp Reservations, its online reservations product, and integrations with partners ranging from Shoptiques.com (boutique shopping) to GolfNow (tee time booking) to BloomNation (flower ordering).

Tucows Company Profile

Tucows Inc. is engaged in providing Internet services. The Company’s segments include Network Access Services and Domain Services. The Network Access Services segment includes mobile, fixed high-speed Internet access services, Internet hosting and network consulting services. The Domain Services segment wholesale and retail domain name registration services, value added services and portfolio services. The Company focuses on serving the needs of this network of resellers by providing services, interfaces, proactive and attentive customer service, reseller-oriented technology and agile design and development processes. The Company focuses its service offerings under brands, including OpenSRS, YummyNames, Platypus, Hover and Ting. As of December 31, 2016, the OpenSRS Domain Service managed 15 million domain names under the Tucows ICANN registrar accreditation and for other registrars. As of December 31, 2016, Ting managed mobile telephony services for approximately 151,000 subscribers.

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