Social Reality (NASDAQ: SRAX) and XO Group (NYSE:XOXO) are both small-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.

Earnings and Valuation

This table compares Social Reality and XO Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Social Reality $32.35 million 0.64 -$4.16 million ($0.95) -2.71
XO Group $155.73 million 3.33 $14.12 million $0.27 77.04

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

Institutional & Insider Ownership

0.8% of Social Reality shares are owned by institutional investors. Comparatively, 83.6% of XO Group shares are owned by institutional investors. 22.3% of Social Reality shares are owned by insiders. Comparatively, 6.8% of XO Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Social Reality and XO Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Social Reality -20.04% -93.45% -29.69%
XO Group 4.55% 4.71% 3.89%

Volatility & Risk

Social Reality has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, XO Group has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Social Reality and XO Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Social Reality 0 0 1 0 3.00
XO Group 0 2 3 0 2.60

Social Reality currently has a consensus price target of $5.00, suggesting a potential upside of 94.55%. XO Group has a consensus price target of $20.15, suggesting a potential downside of 3.13%. Given Social Reality’s stronger consensus rating and higher probable upside, analysts plainly believe Social Reality is more favorable than XO Group.

Summary

XO Group beats Social Reality on 9 of the 13 factors compared between the two stocks.

About Social Reality

Social Reality, Inc. is an Internet advertising and platform technology company. The Company provides tools to automate the digital advertising market. It is engaged in the sales of digital media advertising campaigns to advertising agencies and brands; sales of media inventory through real-time bidding (RTB) exchanges; sale and licensing of its SRAX Social platform and related media, and creation of custom platforms for buying media on SRAX for various brands. Its technology assists publishers in delivering their media inventory to the RTB exchanges. It provides the SRAX platform to brands and their advertising agencies. SRAX Social is a social media and loyalty platform that allows brands to launch and manage their social media initiatives. SRAX MD is an advertisement targeting and data platform for healthcare brands and medical content publishers. SRAX APP is a platform that allows publishers and content owners to launch native mobile applications through its SRAX platform.

About XO Group

XO Group Inc. is engaged in providing content and marketing solutions, targeted advertising programs, transactions and merchandise. The Company’s multi-platform brands guide couples through transformative life stages from getting married with The Knot, to moving in together with The Nest, to having a baby with The Bump, and helping bring celebrations to life with entertainment vendors from GigMasters.com Incorporated (GigMasters). The Knot is the wedding resource and marketplace that engages, matches and connects couples. The Bump is a pregnancy and parenting brand, providing personalized information, content and tools. The Nest is a brand focused on nesters setting up homes and navigating their lives together. GigMasters is an event marketplace for finding and booking the entertainment and vendors for birthday parties, weddings, anniversaries and corporate events, among others. The Company’s product offerings include Online Media Advertising, Transactions, and Publishing and Other.

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