Critical Survey: NerdWallet (NASDAQ:NRDS) and ZoomInfo Technologies (NASDAQ:GTM)

ZoomInfo Technologies (NASDAQ:GTM) and NerdWallet (NASDAQ:NRDS) are both small-cap communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.

Volatility & Risk

ZoomInfo Technologies has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, NerdWallet has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for ZoomInfo Technologies and NerdWallet, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ZoomInfo Technologies	6	10	2	0	1.78
NerdWallet	1	4	3	0	2.25

ZoomInfo Technologies presently has a consensus price target of $5.32, indicating a potential upside of 52.10%. NerdWallet has a consensus price target of $11.40, indicating a potential upside of 44.49%. Given ZoomInfo Technologies’ higher probable upside, research analysts clearly believe ZoomInfo Technologies is more favorable than NerdWallet.

Earnings and Valuation

This table compares ZoomInfo Technologies and NerdWallet”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ZoomInfo Technologies	$1.25 billion	0.82	$124.20 million	($1.97)	-1.78
NerdWallet	$836.60 million	0.60	$48.70 million	$0.89	8.87

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

Profitability

This table compares ZoomInfo Technologies and NerdWallet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ZoomInfo Technologies	-46.26%	22.80%	4.40%
NerdWallet	6.06%	15.51%	12.27%

Insider & Institutional Ownership

95.5% of ZoomInfo Technologies shares are held by institutional investors. Comparatively, 38.8% of NerdWallet shares are held by institutional investors. 9.9% of ZoomInfo Technologies shares are held by insiders. Comparatively, 52.7% of NerdWallet shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

NerdWallet beats ZoomInfo Technologies on 8 of the 14 factors compared between the two stocks.

About ZoomInfo Technologies

ZoomInfo Technologies Inc., through its subsidiaries, provides go-to-market intelligence and engagement platform for sales and marketing teams in the United States and internationally. The company’s cloud-based platform provides information on organizations and professionals to help users identify target customers and decision makers, obtain continually updated predictive lead and company scoring, monitor buying signals and other attributes of target companies, craft messages, engage through automated sales tools, and track progress through the deal cycle. It serves enterprises, mid-market companies, and down to small businesses that operate in various industry verticals, including software, business services, manufacturing, telecommunications, financial services, media and internet, transportation, education, hospitality, and real estate. ZoomInfo Technologies Inc. was founded in 2007 and is headquartered in Vancouver, Washington.

About NerdWallet

NerdWallet, Inc. operates a digital platform that provides consumer-driven advice about personal finance by connecting individuals and small and mid-sized businesses with financial products providers in the United States, the United Kingdom, Australia, and Canada. Its platform offers guidance to consumers through educational content, tools and calculators, and product marketplaces, as well as through NerdWallet app for various financial products, including credit cards, mortgages, insurance, SMB products, personal loans, banking, investing, and student loans. The company was founded in 2009 and is based in San Francisco, California.