System1 (NYSE:SST – Get Free Report) and BuzzFeed (NASDAQ:BZFD – Get Free Report) are both small-cap communication services companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitability and earnings.
Profitability
This table compares System1 and BuzzFeed’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| System1 | -50.66% | -439.90% | -19.35% |
| BuzzFeed | -35.83% | -113.86% | -34.00% |
Insider & Institutional Ownership
87.5% of System1 shares are held by institutional investors. Comparatively, 37.6% of BuzzFeed shares are held by institutional investors. 10.2% of System1 shares are held by company insiders. Comparatively, 15.6% of BuzzFeed shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| System1 | 1 | 1 | 1 | 0 | 2.00 |
| BuzzFeed | 1 | 1 | 0 | 0 | 1.50 |
System1 currently has a consensus target price of $6.50, suggesting a potential upside of 174.26%. BuzzFeed has a consensus target price of $1.00, suggesting a potential downside of 14.53%. Given System1’s stronger consensus rating and higher possible upside, equities analysts plainly believe System1 is more favorable than BuzzFeed.
Volatility and Risk
System1 has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500. Comparatively, BuzzFeed has a beta of 3.88, suggesting that its stock price is 288% more volatile than the S&P 500.
Earnings & Valuation
This table compares System1 and BuzzFeed”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| System1 | $266.13 million | 0.09 | -$65.35 million | ($11.31) | -0.21 |
| BuzzFeed | $170.71 million | 0.57 | -$57.72 million | ($1.54) | -0.76 |
BuzzFeed has lower revenue, but higher earnings than System1. BuzzFeed is trading at a lower price-to-earnings ratio than System1, indicating that it is currently the more affordable of the two stocks.
About System1
System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.
About BuzzFeed
BuzzFeed, Inc., a digital media company, distributes content across owned and operated, as well as third-party platforms. The company offers BuzzFeed, a go-to authority for entertainment, pop culture, and Internet with articles, lists, quizzes, videos, and original series; BuzzFeed News, a pocket friendly newsroom; Tasty, a platform for food content; HuffPost, media platform for news, politics, opinion, entertainment, features, and lifestyle content. It also provides display, programmatic, and video advertising on its owned and operated sites and applications. BuzzFeed, Inc. is headquartered in New York, New York.
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