Pandora Media (NYSE: P) and Townsquare Media (NYSE:TSQ) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitabiliy, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for Pandora Media and Townsquare Media, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pandora Media 1 20 15 0 2.39
Townsquare Media 0 1 1 0 2.50

Pandora Media presently has a consensus price target of $13.45, suggesting a potential upside of 84.29%. Townsquare Media has a consensus price target of $13.00, suggesting a potential upside of 27.45%. Given Pandora Media’s higher possible upside, analysts clearly believe Pandora Media is more favorable than Townsquare Media.

Institutional and Insider Ownership

48.7% of Townsquare Media shares are owned by institutional investors. 6.6% of Pandora Media shares are owned by company insiders. Comparatively, 25.7% of Townsquare Media shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Pandora Media and Townsquare Media’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pandora Media -25.66% -45.15% -21.73%
Townsquare Media 4.20% 6.80% 2.43%

Earnings and Valuation

This table compares Pandora Media and Townsquare Media’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pandora Media $1.40 billion 1.25 -$256.51 million ($1.54) -4.74
Townsquare Media $510.85 million 0.37 $104.08 million $0.73 13.97

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

Volatility and Risk

Pandora Media has a beta of 0.07, indicating that its stock price is 93% less volatile than the S&P 500. Comparatively, Townsquare Media has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500.

Summary

Townsquare Media beats Pandora Media on 9 of the 13 factors compared between the two stocks.

About Pandora Media

Pandora Media, Inc. (Pandora) is a music discovery platform, offering a personalized experience for each of its listeners wherever and whenever they want to listen to music, whether through earbuds, car speakers or live on stage. The Company delivers targeted messages to its listeners using a combination of audio, display and video advertisements. Its segments include Pandora-Internet Radio Service and Ticketfly. As of December 31, 2016, it provided Pandora service through two models: advertising-supported service and subscription service-Pandora Plus. Pandora is integrated with connected devices, including automobiles, automotive aftermarket devices and consumer electronic devices. Its Ticketfly service is a cloud ticketing platform for live events. It operates ticketing service through its subsidiary, Ticketfly, a live events technology company that provides ticketing and marketing software and services for its clients, which are venues and event promoters, across North America.

About Townsquare Media

Townsquare Media, Inc. is a media, entertainment and digital marketing solutions company principally focused on small and mid-sized markets across the United States. The Company operates through two segments: Local Advertising and Live Events. The Company’s Local Advertising segment offers broadcast, digital and mobile advertising within its local markets. The Company’s Live Events segment consists of a range of live events, which the Company creates, promotes and produces, including music concerts, multi-day music festivals, fairs, consumer expositions and trade shows, athletic events, lifestyle events and other forms of entertainment. The Company reports the remainder of its business in its Other Media and Entertainment category, which principally provides digital marketing solutions, e-commerce solutions and digital advertising services nationally. The Company’s assets include radio stations, live events, and digital, mobile, video and social media properties.

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