Analyzing Sprout Social (NASDAQ:SPT) and Akamai Technologies (NASDAQ:AKAM)

Akamai Technologies (NASDAQ:AKAM) and Sprout Social (NASDAQ:SPT) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Volatility and Risk

Akamai Technologies has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Sprout Social has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Insider & Institutional Ownership

94.3% of Akamai Technologies shares are held by institutional investors. 2.0% of Akamai Technologies shares are held by insiders. Comparatively, 10.1% of Sprout Social shares are held by 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 & Valuation

This table compares Akamai Technologies and Sprout Social”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Akamai Technologies	$3.99 billion	3.16	$504.92 million	$3.41	25.73
Sprout Social	$405.91 million	1.61	-$61.97 million	($0.81)	-13.62

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Akamai Technologies and Sprout Social, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Akamai Technologies	5	11	5	0	2.00
Sprout Social	1	6	6	0	2.38

Akamai Technologies presently has a consensus price target of $92.72, suggesting a potential upside of 5.68%. Sprout Social has a consensus price target of $25.82, suggesting a potential upside of 134.07%. Given Sprout Social’s stronger consensus rating and higher probable upside, analysts clearly believe Sprout Social is more favorable than Akamai Technologies.

Profitability

This table compares Akamai Technologies and Sprout Social’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Akamai Technologies	12.26%	14.16%	6.33%
Sprout Social	-10.59%	-18.93%	-7.76%

Summary

Akamai Technologies beats Sprout Social on 9 of the 14 factors compared between the two stocks.

About Akamai Technologies

Akamai Technologies, Inc. provides cloud computing, security, and content delivery services in the United States and internationally. The company offers cloud solutions to keep infrastructure, websites, applications, application programming interfaces, and users safe from various cyberattacks and online threats while enhancing performance. It also provides web and mobile performance solutions to enable dynamic websites and applications; media delivery solutions, including video streaming and video player services, game and software delivery, broadcast operations, authoritative domain name system, resolution, and data and analytics; and cloud computing services, such as compute, storage, networking, database, and container management services to build, deploy, and secure applications and workloads. In addition, the company offers content delivery solutions; and an array of service and support to assist customers with integrating, configuring, optimizing, and managing its offerings. It sells its solutions through various channel partners. Akamai Technologies, Inc. was incorporated in 1998 and is headquartered in Cambridge, Massachusetts.

About Sprout Social

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides cloud software for social messaging, data and workflows in a unified system of record, intelligence, and action. It offers integrated tools, such as social engagement/response; publishing; reporting and analytics; social listening and business intelligence; reputation management; social commerce; employee advocacy; and automation and workflows. In addition, the company provides smart inbox, social customer relationship management, social monitoring and alerts, customer service tools, and automation; and centralized content planning, creation, and publishing, automated scheduling, content performance reporting, suggested content, message approval workflows, publishing permissions and governance, and content and asset libraries. Further, it offers social media; content performance, customer service and team, custom report builder, and reporting API; and market research, brand health, competitive insights, consumer trends, and product feedback; and social commerce, reputation management, employee advocacy, mobile applications, and chat bot creation and management. Additionally, the company offers professional services consisting of consulting and training services. It serves social and community management; public relations; marketing; influencer marketing; customer service and care; commerce, sales and customer acquisition; recruiting and hiring, product development, and business strategy; and small-and-medium-sized businesses, mid-market companies, enterprises, marketing agencies, government, non-profit, and educational institutions. Sprout Social, Inc. was incorporated in 2010 and is headquartered in Chicago, Illinois.