Financial Contrast: Upwork (NASDAQ:UPWK) versus Rakuten (OTCMKTS:RKUNY)

Upwork (NASDAQ:UPWK) and Rakuten (OTCMKTS:RKUNY) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Upwork and Rakuten, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upwork	0	10	3	0	2.23
Rakuten	0	1	0	1	3.00

Upwork presently has a consensus price target of $15.50, suggesting a potential upside of 75.54%. Given Upwork’s higher possible upside, research analysts plainly believe Upwork is more favorable than Rakuten.

Earnings and Valuation

This table compares Upwork and Rakuten”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upwork	$787.78 million	1.38	$115.43 million	$0.81	10.90
Rakuten	$16.70 billion	0.63	-$1.19 billion	($0.37)	-13.01

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

Institutional & Insider Ownership

77.7% of Upwork shares are held by institutional investors. 4.9% of Upwork shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Upwork has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Rakuten has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Profitability

This table compares Upwork and Rakuten’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Upwork	13.81%	17.92%	8.54%
Rakuten	-4.83%	-10.02%	-0.44%

Summary

Upwork beats Rakuten on 11 of the 15 factors compared between the two stocks.

About Upwork

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally. The company’s work marketplace provides access to talent with various skills across a range of categories, including administrative support, sales and marketing, design and creative, and customer service, as well as web, mobile, and software development. Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. The company’s work marketplace offers access to various functionalities for remote engagements with talent, including communication and collaboration, ability to receive talent invoices through their work marketplace, and payment protection. Its marketplace offerings include Upwork Payroll and Upwork Enterprise, as well as managed and escrow services. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in San Francisco, California.

About Rakuten

Rakuten Group, Inc. provides services in e-commerce, fintech, digital content, and communications to various users in Japan and internationally. The company operates through three segments: Internet Services, FinTech, and Mobile. The Internet Services segment provides range of e-commerce sites, such as Rakuten Ichiba, an Internet shopping mall, online cash-back sites, travel booking sites, portal sites, and digital content sites. It also offers messaging services and sells advertising; and manages professional sport teams. The FinTech segment offers financial services over the internet related to banking and securities, credit cards, life insurance, general insurance, electronic payment business, crypto asset (virtual currency) spot transaction, etc. The Mobile segment provides communication services and technology, electricity supply, and digital content site services. The company was formerly known as Rakuten, Inc. and changed its name to Rakuten Group, Inc. in April 2021. Rakuten Group, Inc. was incorporated in 1997 and is headquartered in Setagaya, Japan.