Yelp (YELP) & Connecture (CNXR) Financial Analysis

Connecture (OTCMKTS: CNXR) and Yelp (NYSE:YELP) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

38.8% of Connecture shares are owned by institutional investors. Comparatively, 85.8% of Yelp shares are owned by institutional investors. 68.6% of Connecture shares are owned by insiders. Comparatively, 10.1% of Yelp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Connecture and Yelp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Connecture -19.38% N/A -17.70%
Yelp 2.31% 2.20% 2.00%

Valuation and Earnings

This table compares Connecture and Yelp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Connecture $81.89 million 0.04 -$26.53 million ($0.92) -0.16
Yelp $713.07 million 4.74 -$4.67 million $0.22 185.42

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

Volatility and Risk

Connecture has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500. Comparatively, Yelp has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Connecture and Yelp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Connecture 0 0 0 0 N/A
Yelp 1 15 19 0 2.51

Yelp has a consensus target price of $43.89, suggesting a potential upside of 7.60%. Given Yelp’s higher possible upside, analysts plainly believe Yelp is more favorable than Connecture.

Summary

Yelp beats Connecture on 10 of the 12 factors compared between the two stocks.

Connecture Company Profile

Connecture, Inc. provides a Web-based consumer shopping, enrollment and retention platform for health insurance distribution. The Company caters its services to health insurance marketplace operators, such as health plans, brokers and exchange operators. It operates through four segments: Enterprise/Commercial, Enterprise/State, Medicare and Private Exchange. The Enterprise/Commercial segment offers insurance distribution solutions to health plans. The Enterprise/State segment offers the sales automation solutions to state Governments, which allow its customers to offer customized individual and small group exchanges. The Medicare segment offers Web-based Medicare plan comparison, prescription drug comparison and enrollment tools for health plans, pharmacy benefit managers, pharmacies, field marketing organizations and call centers. The Private Exchange segment offers defined-contribution benefit exchange solutions to benefit consultants, brokers, exchange operators and aggregators.

Yelp Company Profile

Yelp Inc. (Yelp) connects people with local businesses by bringing ‘word of mouth’ online and providing a platform for businesses and consumers to engage and transact. The Company offers local business review sites. Yelp provides a platform for consumers to share their everyday local business experiences with other consumers by posting reviews, tips, photos and videos, and to engage directly with businesses, through reviews, its Request-A-Quote and Message the Business features, and by completing transactions on the Yelp Platform. Yelp also provides businesses of all sizes with a range of free and paid services that help them engage with consumers. The Yelp Platform allows consumers to transact with local businesses directly on Yelp through Yelp Reservations, its online reservations product, and integrations with partners ranging from Shoptiques.com (boutique shopping) to GolfNow (tee time booking) to BloomNation (flower ordering).

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