Autobytel (NASDAQ: AUTO) and ReachLocal (NASDAQ:RLOC) are both cyclical consumer goods & services companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
Autobytel 1.51% 7.47% 5.68%
ReachLocal -5.20% N/A -15.27%

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Autobytel $156.68 million 0.75 $3.87 million $0.17 53.00
ReachLocal N/A N/A N/A ($1.65) -2.79

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Autobytel and ReachLocal, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Autobytel 0 0 2 0 3.00
ReachLocal 0 0 0 0 N/A

Autobytel presently has a consensus price target of $12.00, suggesting a potential upside of 33.19%. Given Autobytel’s higher probable upside, analysts plainly believe Autobytel is more favorable than ReachLocal.

Institutional and Insider Ownership

52.3% of Autobytel shares are owned by institutional investors. 20.7% of Autobytel 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.

Summary

Autobytel beats ReachLocal on 9 of the 9 factors compared between the two stocks.

About Autobytel

AutoWeb, Inc., formerly Autobytel Inc., is an automotive marketing services company that assists automotive retail dealers and automotive manufacturers market and sell new and used vehicles to consumers through the programs for online lead referrals, dealer marketing products and services, and online advertising programs and mobile products. The Company operates through providing automotive marketing services segment. Its consumer-facing automotive Websites, including Website Autobytel.com, provide consumers with information and tools to aid them with the automotive purchase decisions and ability to submit inquiries requesting dealers to contact the consumers regarding purchasing or leasing vehicles. Its AutoWeb pay-per-click advertising marketplace program uses technology to refer consumer traffic to dealers and manufacturer Websites.

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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