Spotify Technology (NYSE:SPOT – Get Free Report) and Definitive Healthcare (NASDAQ:DH – Get Free Report) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.
Profitability
This table compares Spotify Technology and Definitive Healthcare’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Spotify Technology | 15.56% | 35.73% | 19.53% |
| Definitive Healthcare | -76.04% | 4.04% | 1.99% |
Institutional and Insider Ownership
84.1% of Spotify Technology shares are held by institutional investors. Comparatively, 98.7% of Definitive Healthcare shares are held by institutional investors. 0.4% of Spotify Technology shares are held by insiders. Comparatively, 17.1% of Definitive Healthcare shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Spotify Technology | 0 | 6 | 21 | 2 | 2.86 |
| Definitive Healthcare | 3 | 3 | 1 | 1 | 2.00 |
Spotify Technology presently has a consensus price target of $655.92, indicating a potential upside of 30.99%. Definitive Healthcare has a consensus price target of $2.77, indicating a potential upside of 188.16%. Given Definitive Healthcare’s higher probable upside, analysts clearly believe Definitive Healthcare is more favorable than Spotify Technology.
Earnings and Valuation
This table compares Spotify Technology and Definitive Healthcare”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Spotify Technology | $19.44 billion | 5.30 | $2.50 billion | $12.55 | 39.90 |
| Definitive Healthcare | $238.26 million | 0.43 | -$138.93 million | ($1.62) | -0.59 |
Spotify Technology has higher revenue and earnings than Definitive Healthcare. Definitive Healthcare is trading at a lower price-to-earnings ratio than Spotify Technology, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Spotify Technology has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Definitive Healthcare has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.
Summary
Spotify Technology beats Definitive Healthcare on 12 of the 15 factors compared between the two stocks.
About Spotify Technology
Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. This segment sells directly to the end users. The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its users on their computers, tablets, and compatible mobile devices. The company also offers sales, distribution and marketing, contract research and development, and customer and other support services. Spotify Technology S.A. was incorporated in 2006 and is based in Luxembourg City, Luxembourg.
About Definitive Healthcare
Definitive Healthcare Corp., together with its subsidiaries, provides software as a service (SaaS) healthcare commercial intelligence platform in the United States and internationally. Its SaaS platform provides information on healthcare providers and their activities to help its customers from product development to go-to-market planning, and sales and marketing execution. The company's platform consists of various functional areas, such as sales, marketing, clinical research and product development, strategy, talent acquisition, and physician network management. It serves biopharmaceutical and medical device companies, healthcare information technology companies, and healthcare providers; and other diversified companies comprising staffing and commercial real estate firms, financial institutions, and other organizations in the healthcare ecosystem. Definitive Healthcare Corp. was founded in 2011 and is headquartered in Framingham, Massachusetts.
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