Care.com (NYSE: CRCM) and Leaf Group (NASDAQ:LFGR) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Care.com and Leaf Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Care.com 0 1 1 0 2.50
Leaf Group 0 1 4 0 2.80

Care.com presently has a consensus price target of $14.00, suggesting a potential downside of 3.71%. Leaf Group has a consensus price target of $10.30, suggesting a potential upside of 58.46%. Given Leaf Group’s stronger consensus rating and higher possible upside, analysts clearly believe Leaf Group is more favorable than Care.com.

Institutional & Insider Ownership

74.6% of Care.com shares are owned by institutional investors. 24.7% of Care.com shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Care.com and Leaf Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Care.com $169.64 million 2.55 $8.45 million $0.10 145.41
Leaf Group $117.85 million 1.14 -$21.14 million N/A N/A

Care.com has higher revenue and earnings than Leaf Group.

Profitability

This table compares Care.com and Leaf Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Care.com 3.66% 10.98% 4.67%
Leaf Group -31.38% -52.73% -41.29%

Summary

Care.com beats Leaf Group on 8 of the 11 factors compared between the two stocks.

About Care.com

Care.com, Inc. is an online marketplace for finding and managing family care. As of December 31, 2016, the Company had 22.8 million members, including 12.9 million families and 9.9 million caregivers, spanning 19 countries. Its consumer matching solutions allow families to search for, qualify, vet, connect with and select caregivers. It also provides caregivers with solutions to create personal profiles, describe their skills and experience, and otherwise differentiate and market themselves in a fragmented marketplace. In addition to consumer matching solutions, the Company offers its members products and services to facilitate their interaction with caregivers. It serves employers by providing access to certain of its products and services to employer-sponsored families. In addition, it serves care-related businesses, such as day care centers, nanny agencies and home care agencies, willing to market their services to its care-seeking families and recruit its caregiver members.

About Leaf Group

Leaf Group Ltd., formerly Demand Media, Inc., is diversified Internet marketplaces and media company. The Company has online media properties and marketplace platforms that enable communities of creators to reach audiences in lifestyle categories. The Company operates an online studio platform for the professional creation and distribution of content, as well as two online artist marketplaces. Its business comprises two service offerings: Content & Media and Marketplaces. The Company creates media content, including text articles, videos, photographs and designed visual formats, and publishes such content to its owned and operated online properties and to its customers’ online properties. The Company also offers its content creation and distribution platform to provide custom content and other content marketing solutions to brands, publishers and advertisers.

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