Leju Holdings Limited (NYSE: LEJU) and Marcus & Millichap (NYSE:MMI) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Leju Holdings Limited and Marcus & Millichap, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leju Holdings Limited 1 0 0 0 1.00
Marcus & Millichap 0 3 0 0 2.00

Leju Holdings Limited currently has a consensus price target of $2.10, indicating a potential upside of 26.51%. Marcus & Millichap has a consensus price target of $27.00, indicating a potential upside of 3.97%. Given Leju Holdings Limited’s higher probable upside, equities analysts clearly believe Leju Holdings Limited is more favorable than Marcus & Millichap.

Risk & Volatility

Leju Holdings Limited has a beta of 3, meaning that its share price is 200% more volatile than the S&P 500. Comparatively, Marcus & Millichap has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.

Valuation and Earnings

This table compares Leju Holdings Limited and Marcus & Millichap’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Leju Holdings Limited $514.83 million 0.44 -$36.21 million ($0.20) -8.30
Marcus & Millichap $703.37 million 1.41 $101.83 million $1.54 16.86

Marcus & Millichap has higher revenue and earnings than Leju Holdings Limited. Leju Holdings Limited is trading at a lower price-to-earnings ratio than Marcus & Millichap, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Leju Holdings Limited and Marcus & Millichap’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leju Holdings Limited -5.24% -5.42% -3.82%
Marcus & Millichap 8.51% 22.56% 15.79%

Insider and Institutional Ownership

4.6% of Leju Holdings Limited shares are held by institutional investors. Comparatively, 41.9% of Marcus & Millichap shares are held by institutional investors. 58.3% of Marcus & Millichap shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Marcus & Millichap beats Leju Holdings Limited on 10 of the 12 factors compared between the two stocks.

Leju Holdings Limited Company Profile

Leju Holdings Limited is an online to offline (O2O), real estate services provider in China. The Company offers real estate e-commerce, online advertising and online listing services through its online platform, which consists of local Websites covering over 260 cities and various mobile applications. The Company integrates its online platform with offline services to facilitate residential property transactions. In addition to its own Websites, the Company operates various real estate and home furnishing Websites of SINA Corporation (SINA). Its O2O services for new residential properties include selling discount coupons and facilitating online property viewing, physical property visits, marketing events and pre-sale customer support. It sells advertising primarily on the SINA new residential properties and home furnishing Websites, which are operated by the Company.

Marcus & Millichap Company Profile

Marcus & Millichap, Inc. is a brokerage company specializing in commercial real estate investment sales, financing, research and advisory services. The Company offers three primary services to its clients: commercial real estate investment brokerage, financing, and ancillary services, including other research, advisory and consulting services. It provides its financing services through Marcus & Millichap Capital Corporation, which is a broker of debt financing for commercial properties. Its research, advisory and consulting services are designed to assist clients in forming their investment strategy and making transaction decisions. Its advisory services include opinions of value, operating and financial performance benchmarking analysis, and specific asset buy-sell strategies. As of December 31, 2016, the Company had over 1,700 investment sales and financing professionals in 82 offices in the United States and Canada that provide investment brokerage and financing services.

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