Marchex (NASDAQ:MCHX) and TechTarget (NASDAQ:TTGT) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marchex $85.25 million 2.53 -$2.68 million ($0.06) -84.83
TechTarget $121.33 million 4.50 $12.95 million $0.45 43.93

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

Analyst Ratings

This is a summary of current ratings and price targets for Marchex and TechTarget, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marchex 0 0 2 0 3.00
TechTarget 0 0 3 0 3.00

Marchex presently has a consensus target price of $7.00, suggesting a potential upside of 37.52%. TechTarget has a consensus target price of $26.00, suggesting a potential upside of 31.51%. Given Marchex’s higher possible upside, analysts plainly believe Marchex is more favorable than TechTarget.

Profitability

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

Net Margins Return on Equity Return on Assets
Marchex -3.40% -1.77% -1.47%
TechTarget 11.41% 10.74% 7.81%

Volatility and Risk

Marchex has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, TechTarget has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Insider and Institutional Ownership

49.7% of Marchex shares are held by institutional investors. Comparatively, 72.7% of TechTarget shares are held by institutional investors. 22.5% of Marchex shares are held by insiders. Comparatively, 27.1% of TechTarget shares are held by 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

TechTarget beats Marchex on 11 of the 13 factors compared between the two stocks.

Marchex Company Profile

Marchex, Inc. operates as a call analytics company that helps businesses connect, drive, measure, and convert callers into customers. Its products include Marchex Call Analytics, an analytics platform for enterprises that depend on inbound phone calls to drive sales, appointments, and reservations; Marchex Speech Analytics that enable actionable insights for enterprise, mid-sized, and small businesses; Text Analytics and Communications, which enable businesses to send and receive text/SMS messages with customers; Call Monitoring; Marchex Omnichannel Analytics Cloud products, such as Marchex Search Analytics, a product for search marketers that drive phone calls from search campaigns, as well as Marchex Display and Video Analytics, a product for marketers that buy digital display advertising; Marchex Site Analytics, a product for marketers that can drive phone calls from Websites; and Marchex Social Analytics, a product for marketers that buy social media advertising. The company also offers Marchex Audience Targeting that leverages call data to automatically build audience segments for display and social media platforms; and Marchex Call Marketplace, a mobile advertising network for businesses that depend on inbound phone calls to drive sales, as well as provides advertisers ad placements across various mobile and online media sources to deliver qualified calls to their businesses. In addition, it provides Local Leads platform, a 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 through their existing sales channels to small business advertisers. Marchex, Inc. was founded in 2003 and is headquartered in Seattle, Washington.

TechTarget Company Profile

TechTarget, Inc. provides specialized online content for buyers of enterprise information technology (IT) products and services in the United States, the United Kingdom, and internationally. It also provides purchase-intent marketing and sales services for enterprise technology vendors; and customized marketing programs that integrate demand generation and brand advertising techniques. The company offers online services, including IT Deal Alert, core online, demand solutions, brand solutions, and custom content creation. It also operates an integrated content platform that consists of a network of approximately 140 Websites that focus on a specific IT sector, such as storage, security, networking, or business applications. In addition, the company enables registered members to conduct their pre-purchase research by accessing vendor supplied content through a network of Websites. TechTarget, Inc. was founded in 1999 and is headquartered in Newton, Massachusetts.

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