Critical Comparison: Nextdoor (NYSE:KIND) & AppLovin (NASDAQ:APP)

AppLovin (NASDAQ:APP) and Nextdoor (NYSE:KIND) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Profitability

This table compares AppLovin and Nextdoor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AppLovin	10.84%	24.69%	6.54%
Nextdoor	-67.69%	-24.22%	-20.71%

Analyst Ratings

This is a breakdown of current recommendations for AppLovin and Nextdoor, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AppLovin	1	4	12	0	2.65
Nextdoor	0	4	0	0	2.00

AppLovin presently has a consensus target price of $59.31, suggesting a potential downside of 12.01%. Nextdoor has a consensus target price of $2.85, suggesting a potential upside of 41.79%. Given Nextdoor’s higher possible upside, analysts clearly believe Nextdoor is more favorable than AppLovin.

Valuation and Earnings

This table compares AppLovin and Nextdoor’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AppLovin	$2.63 billion	8.85	$356.71 million	$1.00	68.17
Nextdoor	$218.31 million	3.61	-$147.76 million	($0.38)	-5.26

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

Volatility & Risk

AppLovin has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500. Comparatively, Nextdoor has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

41.9% of AppLovin shares are owned by institutional investors. Comparatively, 35.7% of Nextdoor shares are owned by institutional investors. 12.4% of AppLovin shares are owned by company insiders. Comparatively, 47.6% of Nextdoor shares are owned by company 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.

Summary

AppLovin beats Nextdoor on 12 of the 14 factors compared between the two stocks.

About AppLovin

AppLovin Corporation engages in building a software-based platform for advertisers to enhance the marketing and monetization of their content in the United States and internationally. It operates through two segments, Software Platform and Apps. The company's software solutions include AppDiscovery, a marketing software solution, which matches advertiser demand with publisher supply through auctions; MAX, an in-app bidding software that optimizes the value of a publisher's advertising inventory by running a real-time competitive auction; Adjust, a measurement and analytics marketing platform that provides marketers with the visibility, insights, and tools needed to grow their apps from early stage to maturity; and Wurl, a connected TV platform, which distributes streaming video for content companies and provides advertising and publishing solutions through its AdPool, ContentDiscovery, and Global FAST Pass products. It also offers SparkLabs, which uses app store optimization to enhance ad visibility; AppLovin Exchange, which connects buyers to mobile and CTV devices through a single and direct RTB exchange; and Array, an end-to-end app management suite for mobile operators and end users. In addition, the company operates various free-to-play mobile games. It serves individuals, small and independent businesses, enterprises, advertisers and advertising networks, mobile app publishers, indie studio developers, and internet platforms. AppLovin Corporation was incorporated in 2011 and is headquartered in Palo Alto, California.

About Nextdoor

Nextdoor Holdings, Inc. operates a neighborhood network that connects neighbors, businesses, and public services in the United States and internationally. The company enables neighbors and organizations to get information, give and get help, and build connections. It also offers advertising solutions, designs to generate value for businesses for connection and sales expansion. The company is headquartered in San Francisco, California.