Criteo (NASDAQ: CRTO) and ReachLocal (NASDAQ:RLOC) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.

Risk & Volatility

Criteo has a beta of 2.72, meaning that its share price is 172% more volatile than the S&P 500. Comparatively, ReachLocal has a beta of -0.18, meaning that its share price is 118% less volatile than the S&P 500.

Insider and Institutional Ownership

84.4% of Criteo shares are owned by institutional investors. 5.6% of Criteo shares are owned 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.

Earnings & Valuation

This table compares Criteo and ReachLocal’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Criteo $2.05 billion 1.35 $186.34 million $1.08 41.56
ReachLocal N/A N/A N/A ($1.66) -2.77

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Criteo and ReachLocal, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Criteo 0 5 8 0 2.62
ReachLocal 0 0 0 0 N/A

Criteo presently has a consensus price target of $56.71, suggesting a potential upside of 26.36%. Given Criteo’s higher probable upside, equities research analysts plainly believe Criteo is more favorable than ReachLocal.

Profitability

This table compares Criteo and ReachLocal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Criteo 3.48% 13.94% 7.74%
ReachLocal -5.20% N/A -15.27%

Summary

Criteo beats ReachLocal on 10 of the 10 factors compared between the two stocks.

About Criteo

Criteo SA is a France-based company specializing in digital performance marketing. Its solution consists of the Criteo Engine, the Company’s data assets, access to inventory, and its advertiser and publisher platforms. The Criteo Engine consists of various machine learning algorithms, such as prediction, recommendation, bidding and creative algorithms and the global hardware and software infrastructure. The Criteo Engine delivers advertisements through multiple marketing channels and formats, including display advertising banners, native advertising banners and marketing messages delivered to opt-in e-mail addresses. Advertisements are delivered on all devices and screens, including Web browsers on desktops and laptops, mobile Web browsers on smartphones and tablets, as well as mobile applications. It operates in approximately 90 countries through a network of over 30 international offices located in Europe, the Americas and the Asia-Pacific region. It operates through HookLogic Inc.

About ReachLocal

ReachLocal, Inc. (ReachLocal) offers a range of online marketing and reporting solutions. The Company’s digital marketing solution consists of products and solutions in three categories: digital advertising (including ReachSearch, ReachDisplay, ReachDisplay InApp and ReachRetargeting); Web presence (including ReachSite+ReachEdge, ReachSEO, ReachCast, ReachListings and TotalLiveChat), and software (ReachEdge and Kickserv). It focuses on small to medium-sized businesses (SMBs). The Company delivers its suite of products and solutions to local businesses through a combination of its technology platform, its direct inside and outside sales force, and select third-party agencies and resellers. It also focuses on certain core verticals, which include home services, professional services, specialty services and healthcare. It also provides solutions to multi-location advertisers, such as franchises and other businesses that have multiple locations across a number of cities and states.

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