Leaf Group (NASDAQ: LFGR) and Weibo Corporation (NASDAQ:WB) are both internet services – nec companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Leaf Group and Weibo Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leaf Group 0 1 4 0 2.80
Weibo Corporation 0 0 7 0 3.00

Leaf Group currently has a consensus target price of $10.30, indicating a potential upside of 42.07%. Weibo Corporation has a consensus target price of $86.71, indicating a potential downside of 12.66%. Given Leaf Group’s higher probable upside, analysts plainly believe Leaf Group is more favorable than Weibo Corporation.

Valuation & Earnings

This table compares Leaf Group and Weibo Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Leaf Group N/A N/A N/A ($1.67) -4.34
Weibo Corporation $655.80 million 33.49 $108.02 million $0.87 114.11

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

Profitability

This table compares Leaf Group and Weibo Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leaf Group -31.38% -52.73% -41.29%
Weibo Corporation 23.22% 24.45% 17.30%

Volatility & Risk

Leaf Group has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500. Comparatively, Weibo Corporation has a beta of 2.47, meaning that its share price is 147% more volatile than the S&P 500.

Institutional & Insider Ownership

19.7% of Weibo Corporation shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Weibo Corporation beats Leaf Group on 9 of the 10 factors compared between the two stocks.

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.

Weibo Corporation Company Profile

Weibo Corporation is a social media platform for people to create, distribute and discover Chinese-language content. The Company provides ways for people and organizations to publicly express themselves in real time, interact with others on a global platform and stay connected with the world. It operates in two segments: advertising and marketing services and other services. It offers self-expression products that enable its users to express themselves on its platform; social products to promote social interaction between users on its platform; discovery products to help users discover content on its platform, and notifications to notify users on Weibo account activities through short message service (SMS) or push notification on their device. It offers advertising and marketing solutions to enable its customers to promote their brands and conduct marketing activities. It offers its platform partners with tools and application programming interfaces (APIs).

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