Critical Contrast: Leaf Group (DMD) & Autohome (ATHM)

Leaf Group (NYSE: DMD) and Autohome (NYSE:ATHM) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

Earnings & Valuation

This table compares Leaf Group and Autohome’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Leaf Group N/A N/A N/A ($0.24) -26.46
Autohome $979.92 million 7.11 $238.72 million $1.87 32.13

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

Profitability

This table compares Leaf Group and Autohome’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%
Autohome 23.17% 22.64% 15.55%

Risk & Volatility

Leaf Group has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Autohome has a beta of 2.19, suggesting that its stock price is 119% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Leaf Group and Autohome, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leaf Group 0 1 1 0 2.50
Autohome 0 0 4 0 3.00

Leaf Group presently has a consensus target price of $7.75, indicating a potential upside of 22.05%. Autohome has a consensus target price of $58.33, indicating a potential downside of 2.91%. Given Leaf Group’s higher probable upside, research analysts clearly believe Leaf Group is more favorable than Autohome.

Institutional & Insider Ownership

58.8% of Leaf Group shares are held by institutional investors. Comparatively, 40.1% of Autohome shares are held by institutional investors. 44.0% of Leaf Group shares are held by company insiders. Comparatively, 5.7% of Autohome shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Autohome 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 Autohome

Autohome Inc. is an online destination for automobile consumers in China. The Company is engaged in the provision of online advertising and dealer subscription services in the People’s Republic of China (PRC). The Company, through its Websites, autohome.com.cn and che168.com, and mobile applications, delivers content to automobile buyers and owners. These services are offered to automakers and dealers, and advertising agencies that represent automakers and dealers in the automobile industry. The Company’s autohome.com.cn targets automobile consumers with a focus on new automobiles. The Company’s professionally produced content is created by editorial team and includes automobile-related articles and reviews, pricing trends in various local markets, and photos and video clips. Its database also includes new and used automobile listings and promotional information. Its dealer subscription services allow dealers to market their inventory and services through its Websites.

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