Leaf Group (NASDAQ: LFGR) and Shutterstock (NYSE:SSTK) are both small-cap technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Analyst Ratings

This is a summary of current ratings and price targets for Leaf Group and Shutterstock, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leaf Group 0 1 4 0 2.80
Shutterstock 1 6 0 0 1.86

Leaf Group presently has a consensus price target of $10.30, indicating a potential upside of 49.28%. Shutterstock has a consensus price target of $38.40, indicating a potential upside of 12.81%. Given Leaf Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Leaf Group is more favorable than Shutterstock.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Leaf Group $117.85 million 1.19 -$21.14 million N/A N/A
Shutterstock $517.47 million 2.28 $57.99 million $0.81 42.02

Shutterstock has higher revenue and earnings than Leaf Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Leaf Group -31.38% -52.73% -41.29%
Shutterstock 5.59% 11.08% 6.34%

Insider and Institutional Ownership

62.9% of Shutterstock shares are held by institutional investors. 47.3% of Shutterstock shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

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

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.

About Shutterstock

Shutterstock, Inc. (Shutterstock) is a global technology company that operates a two-sided marketplace for professionals to license content. The Company’s library of content includes digital imagery, which consists of licensed photographs, vectors, illustrations and video clips that customers use in their visual communications, such as Websites, digital and print marketing materials, corporate communications, books, publications and video content, and commercial music, which consists of music tracks and sound effects and which is often used to complement digital imagery. It also offers digital asset management services through its cloud-based digital asset management platform (webdam). Its global marketplace brings together users and contributors of content by providing a collection of content its customers can pay to license and incorporate into their work and by compensating contributors as their content is licensed to customers.

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