Analyzing Bakkt (NYSE:BKKT) and MarketWise (NASDAQ:MKTW)

Bakkt (NYSE:BKKT) and MarketWise (NASDAQ:MKTW) are both small-cap business services companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Volatility and Risk

Bakkt has a beta of 5.93, meaning that its share price is 493% more volatile than the S&P 500. Comparatively, MarketWise has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Institutional & Insider Ownership

11.1% of Bakkt shares are owned by institutional investors. Comparatively, 23.0% of MarketWise shares are owned by institutional investors. 2.5% of Bakkt shares are owned by company insiders. Comparatively, 29.3% of MarketWise shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Bakkt and MarketWise’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bakkt	-1.07%	-45.27%	-16.75%
MarketWise	1.70%	-2.62%	2.56%

Earnings & Valuation

This table compares Bakkt and MarketWise”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bakkt	$3.49 billion	0.11	-$46.66 million	($5.13)	-2.38
MarketWise	$408.70 million	0.61	$7.06 million	$2.52	6.15

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

Analyst Recommendations

This is a summary of recent recommendations for Bakkt and MarketWise, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bakkt	1	0	1	0	2.00
MarketWise	1	0	1	0	2.00

Bakkt presently has a consensus target price of $13.00, indicating a potential upside of 6.37%. MarketWise has a consensus target price of $20.00, indicating a potential upside of 28.95%. Given MarketWise’s higher probable upside, analysts clearly believe MarketWise is more favorable than Bakkt.

Summary

MarketWise beats Bakkt on 10 of the 12 factors compared between the two stocks.

About Bakkt

Bakkt Holdings, Inc. offers software as a service and application programming interface solutions for crypto and loyalty, powering engagement, and performance. The company operates Bakkt Marketplace, a platform that enables consumers to buy, sell, and store crypto in an embedded web experience; Bakkt Crypto, a platform that supports clients with a range of crypto solutions; and Bakkt Trust, institutional-grade qualified custody solution for market participants. Its platform also offers a range of loyalty solutions, including redemption solutions for various rewards categories comprising travel, gift cards, and merchandise; travel solutions that offer a retail e-commerce booking platform, as well as live-agent booking and servicing; and unified shopping experience. The company was founded in 2018 and is headquartered in Alpharetta, Georgia.

About MarketWise

MarketWise, Inc. operates a content and technology multi-brand platform for self-directed investors in the United States and Internationally. Its platform includes subscription businesses that provides financial research, software, education, and tools to navigate the financial markets. The company offers various investment strategies, such as value investing, income, growth, commodities, cryptocurrencies, venture, crowdfunded investing, biotechnology, mutual funds, options, and trading; investment research product portfolio through a range of media, including desktops, laptops, tablets, and mobile; and financial newsletters. It provides a suite of stock research tools and portfolio management services under the Chaikin Analytics brand; portfolio management software tools under the TradeSmith brand name; and database of accounting-based financial summaries under the Altimetry brand. In addition, the company develops screeners, monitors, portfolio management tools, and proprietary indicators that produce a composite score to rank publicly traded companies. The company was founded in 1999 and is headquartered in Baltimore, Maryland.