Contrasting Zillow Group (NASDAQ:Z) & Dropbox (NASDAQ:DBX)

Dropbox (NASDAQ:DBX) and Zillow Group (NASDAQ:Z) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Institutional and Insider Ownership

94.8% of Dropbox shares are owned by institutional investors. Comparatively, 71.0% of Zillow Group shares are owned by institutional investors. 30.0% of Dropbox shares are owned by company insiders. Comparatively, 25.0% of Zillow Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Dropbox has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Zillow Group has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500.

Profitability

This table compares Dropbox and Zillow Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dropbox	20.17%	-37.47%	18.80%
Zillow Group	0.89%	0.56%	0.48%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Dropbox and Zillow Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dropbox	1	3	1	0	2.00
Zillow Group	1	8	3	2	2.43

Dropbox presently has a consensus target price of $27.50, indicating a potential upside of 2.65%. Zillow Group has a consensus target price of $90.60, indicating a potential upside of 97.34%. Given Zillow Group’s stronger consensus rating and higher probable upside, analysts plainly believe Zillow Group is more favorable than Dropbox.

Valuation and Earnings

This table compares Dropbox and Zillow Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dropbox	$2.52 billion	2.56	$508.40 million	$1.86	14.40
Zillow Group	$2.58 billion	4.26	$23.00 million	$0.09	510.11

Dropbox has higher earnings, but lower revenue than Zillow Group. Dropbox is trading at a lower price-to-earnings ratio than Zillow Group, indicating that it is currently the more affordable of the two stocks.

Summary

Zillow Group beats Dropbox on 9 of the 15 factors compared between the two stocks.

About Dropbox

Dropbox, Inc. provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

About Zillow Group

Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop and floor plans. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.