Financial Contrast: System1 (NYSE:SST) versus BuzzFeed (NASDAQ:BZFD)

BuzzFeed (NASDAQ:BZFD) and System1 (NYSE:SST) are both small-cap communication services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Profitability

This table compares BuzzFeed and System1’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BuzzFeed	-35.83%	-113.86%	-34.00%
System1	-50.66%	-439.90%	-19.35%

Volatility & Risk

BuzzFeed has a beta of 3.78, meaning that its stock price is 278% more volatile than the S&P 500. Comparatively, System1 has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500.

Insider & Institutional Ownership

37.6% of BuzzFeed shares are owned by institutional investors. Comparatively, 87.5% of System1 shares are owned by institutional investors. 15.6% of BuzzFeed shares are owned by company insiders. Comparatively, 10.2% of System1 shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for BuzzFeed and System1, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BuzzFeed	1	1	0	0	1.50
System1	1	0	1	0	2.00

BuzzFeed presently has a consensus price target of $1.00, suggesting a potential downside of 15.25%. System1 has a consensus price target of $6.50, suggesting a potential upside of 141.37%. Given System1’s stronger consensus rating and higher possible upside, analysts clearly believe System1 is more favorable than BuzzFeed.

Valuation and Earnings

This table compares BuzzFeed and System1″s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BuzzFeed	$185.27 million	0.53	-$57.72 million	($1.54)	-0.77
System1	$266.13 million	0.11	-$65.35 million	($11.31)	-0.24

BuzzFeed has higher earnings, but lower revenue than System1. BuzzFeed is trading at a lower price-to-earnings ratio than System1, indicating that it is currently the more affordable of the two stocks.

About BuzzFeed

BuzzFeed, Inc., a digital media company, distributes content across owned and operated, as well as third-party platforms. The company offers BuzzFeed, a go-to authority for entertainment, pop culture, and Internet with articles, lists, quizzes, videos, and original series; BuzzFeed News, a pocket friendly newsroom; Tasty, a platform for food content; HuffPost, media platform for news, politics, opinion, entertainment, features, and lifestyle content. It also provides display, programmatic, and video advertising on its owned and operated sites and applications. BuzzFeed, Inc. is headquartered in New York, New York.

About System1

System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.