Connecture (OTCMKTS: CNXR) and Yelp (NYSE:YELP) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Connecture and Yelp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Connecture 0 0 0 0 N/A
Yelp 0 16 19 0 2.54

Yelp has a consensus price target of $43.65, indicating a potential downside of 7.08%. Given Yelp’s higher probable upside, analysts plainly believe Yelp is more favorable than Connecture.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Connecture $81.89 million 0.08 -$26.53 million ($0.92) -0.30
Yelp $713.07 million 5.46 -$4.67 million $0.23 204.22

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

Profitability

This table compares Connecture and Yelp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Connecture -19.38% N/A -17.70%
Yelp 2.31% 2.20% 2.00%

Risk and Volatility

Connecture has a beta of 1.8, suggesting that its share price is 80% more volatile than the S&P 500. Comparatively, Yelp has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Institutional & Insider Ownership

38.6% of Connecture shares are held by institutional investors. Comparatively, 85.7% of Yelp shares are held by institutional investors. 58.1% of Connecture shares are held by company insiders. Comparatively, 10.1% of Yelp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Yelp beats Connecture on 10 of the 12 factors compared between the two stocks.

Connecture Company Profile

Connecture, Inc. provides a Web-based consumer shopping, enrollment and retention platform for health insurance distribution. The Company caters its services to health insurance marketplace operators, such as health plans, brokers and exchange operators. It operates through four segments: Enterprise/Commercial, Enterprise/State, Medicare and Private Exchange. The Enterprise/Commercial segment offers insurance distribution solutions to health plans. The Enterprise/State segment offers the sales automation solutions to state Governments, which allow its customers to offer customized individual and small group exchanges. The Medicare segment offers Web-based Medicare plan comparison, prescription drug comparison and enrollment tools for health plans, pharmacy benefit managers, pharmacies, field marketing organizations and call centers. The Private Exchange segment offers defined-contribution benefit exchange solutions to benefit consultants, brokers, exchange operators and aggregators.

Yelp Company Profile

Yelp Inc. (Yelp) connects people with local businesses by bringing ‘word of mouth’ online and providing a platform for businesses and consumers to engage and transact. The Company offers local business review sites. Yelp provides a platform for consumers to share their everyday local business experiences with other consumers by posting reviews, tips, photos and videos, and to engage directly with businesses, through reviews, its Request-A-Quote and Message the Business features, and by completing transactions on the Yelp Platform. Yelp also provides businesses of all sizes with a range of free and paid services that help them engage with consumers. The Yelp Platform allows consumers to transact with local businesses directly on Yelp through Yelp Reservations, its online reservations product, and integrations with partners ranging from Shoptiques.com (boutique shopping) to GolfNow (tee time booking) to BloomNation (flower ordering).

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