Momo (NASDAQ: MOMO) and GrubHub (NASDAQ:GRUB) are both mid-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Valuation and Earnings

This table compares Momo and GrubHub’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Momo N/A N/A N/A $1.08 40.57
GrubHub $575.85 million 8.08 $125.16 million N/A N/A

GrubHub has higher revenue and earnings than Momo.

Insider and Institutional Ownership

43.5% of Momo shares are owned by institutional investors. 61.4% of Momo shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Momo and GrubHub’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Momo 28.59% 36.36% 30.24%
GrubHub 9.29% 5.84% 4.76%

Analyst Recommendations

This is a summary of recent ratings and target prices for Momo and GrubHub, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Momo 0 1 12 0 2.92
GrubHub 1 7 13 0 2.57

Momo presently has a consensus target price of $39.54, suggesting a potential downside of 9.77%. GrubHub has a consensus target price of $48.15, suggesting a potential downside of 10.62%. Given Momo’s stronger consensus rating and higher possible upside, equities analysts clearly believe Momo is more favorable than GrubHub.

Summary

Momo beats GrubHub on 7 of the 10 factors compared between the two stocks.

Momo Company Profile

Momo Inc. is a holding company. The Company operates Momo, a mobile-based social networking platform. The Company’s Momo platform includes its Momo mobile application and a range of related features, functionalities, tools and services that it provides to users, customers and platform partners. Momo users can maintain their relationships through its private and group communication tools, content creation and sharing functions, as well as the offline social activities promoted on its platform. It also offers live music and entertainment broadcasts on its Momo platform. The Momo mobile application, which is available on android, iPhone operating system (iOS) and Windows platforms, enables users to establish social relationships based on locations and interests. Momo offers a personal way for users to discover people nearby, and the Company facilitates the connecting, communicating, interacting, and content sharing with others.

GrubHub Company Profile

Grubhub Inc. provides an online and mobile platform for restaurant pick-up and delivery orders. Its products include Grubhub and Seamless Mobile Applications and Mobile Website, Grubhub and Seamless Websites, Corporate Program, Delivery, Allmenus and MenuPages, Grubhub for Restaurants, and Restaurant Websites. As of December 31, 2016, the Company connected more than 50,000 local restaurants with diners in more than 1,100 cities across the United States. In certain markets, the Company also provides delivery services to restaurants on its platform that do not have their own delivery operations. The Company provides diners on the platform with a personalized platform that helps them search for local restaurants and then place an order from an Internet-connected device. It also provides diners with information about their orders and status. The Company also provides delivery services to restaurants on its platform that do not have their own delivery operations.

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