Comparing System1 (NYSE:SST) and Grindr (NYSE:GRND)

System1 (NYSE:SST) and Grindr (NYSE:GRND) are both communication services companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
System1	-50.66%	-439.90%	-19.35%
Grindr	18.75%	357.13%	20.08%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for System1 and Grindr, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
System1	1	1	1	0	2.00
Grindr	0	1	6	0	2.86

System1 currently has a consensus target price of $6.50, indicating a potential upside of 270.37%. Grindr has a consensus target price of $20.20, indicating a potential upside of 48.50%. Given System1’s higher probable upside, analysts clearly believe System1 is more favorable than Grindr.

Valuation & Earnings

This table compares System1 and Grindr”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
System1	$266.13 million	0.07	-$65.35 million	($11.31)	-0.16
Grindr	$439.90 million	5.38	$94.75 million	$0.50	27.21

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

Institutional & Insider Ownership

87.5% of System1 shares are held by institutional investors. Comparatively, 7.2% of Grindr shares are held by institutional investors. 10.2% of System1 shares are held by insiders. Comparatively, 60.9% of Grindr shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

System1 has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500. Comparatively, Grindr has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500.

Summary

Grindr beats System1 on 11 of the 14 factors compared between the two stocks.

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.

About Grindr

Grindr Inc. operates social network and dating application for the lesbian, gay, bisexual, transgender, and queer (LGBTQ) communities worldwide. Its platform enables LGBTQ people to find and engage with each other, share content and experiences, and express themselves. The company offers ad-supported service and a premium subscription version. Grindr Inc. was founded in 2009 and is headquartered in West Hollywood, California.