Autobytel (NASDAQ: ABTL) and Marchex (NASDAQ:MCHX) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Autobytel and Marchex, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Autobytel 0 1 1 0 2.50
Marchex 0 1 0 0 2.00

Autobytel presently has a consensus target price of $20.00, suggesting a potential upside of 179.72%. Marchex has a consensus target price of $3.00, suggesting a potential downside of 6.25%. Given Autobytel’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Autobytel is more favorable than Marchex.

Volatility and Risk

Autobytel has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Marchex has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Institutional and Insider Ownership

58.6% of Autobytel shares are owned by institutional investors. Comparatively, 49.7% of Marchex shares are owned by institutional investors. 12.8% of Autobytel shares are owned by insiders. Comparatively, 27.4% of Marchex shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Autobytel and Marchex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Autobytel 3.15% 10.96% 8.20%
Marchex -15.53% -10.65% -9.44%

Valuation and Earnings

This table compares Autobytel and Marchex’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Autobytel $156.22 million 0.50 $14.97 million $0.37 19.32
Marchex $105.54 million 1.30 -$12.35 million ($0.39) -8.21

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

Summary

Autobytel beats Marchex on 10 of the 13 factors compared between the two stocks.

Autobytel Company Profile

Autobytel Inc. is an automotive marketing services company that assists automotive retail dealers and automotive manufacturers market and sell new and used vehicles to consumers through the programs for online lead referrals, dealer marketing products and services, and online advertising programs and mobile products. The Company operates through providing automotive marketing services segment. Its consumer-facing automotive Websites, including Website Autobytel.com, provide consumers with information and tools to aid them with the automotive purchase decisions and ability to submit inquiries requesting dealers to contact the consumers regarding purchasing or leasing vehicles. Its AutoWeb pay-per-click advertising marketplace program uses technology to refer consumer traffic to dealers and manufacturer Websites. For consumers who may not be able to secure loans through conventional lending sources, the Websites provide these consumers the ability to submit inquiries requesting dealers.

Marchex Company Profile

Marchex, Inc. is a mobile advertising analytics company. The Company offers products and services for enterprises that depend on consumer phone calls to drive sales. Its media analytics products can provide actionable intelligence on media channels advertisers use to acquire customers over the phone. Its Marchex Omnichannel Analytics Cloud helps marketers connect customer conversions driven from paid media channels, including search, display and video, social and sites, to phone calls made to a business. Its product offerings include Marchex Call Analytics, Marchex Search Analytics, Marchex Display and Video Analytics, Marchex Social Analytics, Marchex Call Marketplace and Local Leads. Its Local Leads platform is a white-labeled, full service advertising solution for small business resellers, such as Yellow Pages providers and vertical marketing service providers, to sell call advertising, search marketing and other lead generation products.

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