Contrasting Perion Network (NASDAQ:PERI) and Townsquare Media (NYSE:TSQ)

Townsquare Media (NYSE:TSQ) and Perion Network (NASDAQ:PERI) are both small-cap communication services companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Townsquare Media and Perion Network, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Townsquare Media	1	1	1	0	2.00
Perion Network	1	1	3	1	2.67

Townsquare Media currently has a consensus price target of $10.00, suggesting a potential upside of 207.22%. Perion Network has a consensus price target of $13.83, suggesting a potential upside of 60.85%. Given Townsquare Media’s higher possible upside, equities analysts plainly believe Townsquare Media is more favorable than Perion Network.

Profitability

This table compares Townsquare Media and Perion Network’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Townsquare Media	-11.82%	-5.59%	0.51%
Perion Network	-2.95%	2.43%	1.81%

Insider & Institutional Ownership

71.7% of Townsquare Media shares are held by institutional investors. Comparatively, 68.1% of Perion Network shares are held by institutional investors. 30.3% of Townsquare Media shares are held by insiders. Comparatively, 2.8% of Perion Network shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Townsquare Media has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Perion Network has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Valuation & Earnings

This table compares Townsquare Media and Perion Network”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Townsquare Media	$425.39 million	0.14	-$9.75 million	($2.88)	-1.13
Perion Network	$439.93 million	0.76	-$7.93 million	($0.35)	-24.57

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

Summary

Perion Network beats Townsquare Media on 10 of the 15 factors compared between the two stocks.

About Townsquare Media

Townsquare Media, Inc. operates as a digital media and marketing solutions company in small and medium-sized businesses. It operates through three segments: Subscription Digital Marketing Solutions, Digital Advertising, and Broadcast Advertising. The Subscription Digital Marketing Solutions segment offers website design, creation, and development, as well as hosting services; and search engine optimization, online directory optimization, e-commerce solutions, online reputation monitoring, social media management, appointment scheduling, payment and invoice, customer management, and email and SMS marketing services. The Digital Advertising segment provides digital advertising on its owned and operated, digital programmatic advertising, and data analytics and management platform. The Broadcast Advertising segment engages in the sale of advertising on local radio stations to local, regional, and national spot advertisers, as well as national network advertisers. It also owns and operates live events, including concerts, expositions, and other experiential events; and operates local media under the WYRK.com, WJON.com, and NJ101.5.com brands, as well as national music under the XXLmag.com, TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com brands. The company was formerly known as Regent Communications, Inc. and changed its name to Townsquare Media, Inc. in May 2010. Townsquare Media, Inc. is headquartered in Purchase, New York.

About Perion Network

Perion Network Ltd. provides digital advertising solutions to brands, agencies, and publishers in North America, Europe, and internationally. It offers Wildfire, a content monetization platform; search monetization solutions, including website monetization, search mediation, and app monetization; and cross-channel digital advertising software as a service platform. The company also provides supply management platform; demand management platform for campaign planning and design; analytics platform, which provides information and performance insights; creative platform, a robust media platform; and an AI platform that uses machine learning to bring intelligence to the various phases of campaigns. In addition, it offers an actionable performance monitoring platform to support the various phases of campaign management; an online video player and integrated ad server to upload, manage, and stream video content; content monetization system, which integrates ads within the content layouts at the page level. Further, the company provides a publisher management system that provides analytics and performance optimization tools, as well as reports; search-demand management systems; monetization products that integrate and onboards demand vendors; and AI Systems. Additionally, it offers Intelligent HUB (iHUB), which connects the supply and demand sides of the marketplace; and strategic optimization of relevant traits (SORT), a provisional patent technology that eliminates the need for cookies. The company was formerly known as IncrediMail Ltd. and changed its name to Perion Network Ltd. in November 2011. Perion Network Ltd. was incorporated in 1999 and is headquartered in Holon, Israel.