System1 (NYSE:SST – Get Free Report) and Teads (NASDAQ:TEAD – Get Free Report) are both small-cap communication services companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.
Risk & Volatility
System1 has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500. Comparatively, Teads has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for System1 and Teads, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| System1 | 1 | 0 | 1 | 0 | 2.00 |
| Teads | 1 | 2 | 1 | 0 | 2.00 |
Insider and Institutional Ownership
87.5% of System1 shares are owned by institutional investors. Comparatively, 60.4% of Teads shares are owned by institutional investors. 10.2% of System1 shares are owned by company insiders. Comparatively, 12.0% of Teads shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares System1 and Teads”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 | 0.08 | -$65.35 million | ($11.31) | -0.18 |
| Teads | $571.30 million | 0.11 | -$517.07 million | ($5.53) | -0.12 |
System1 has higher earnings, but lower revenue than Teads. System1 is trading at a lower price-to-earnings ratio than Teads, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares System1 and Teads’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| System1 | -50.66% | -439.90% | -19.35% |
| Teads | -43.32% | -49.37% | -6.14% |
Summary
Teads beats System1 on 9 of the 12 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 Teads
Outbrain Inc., together with its subsidiaries, operates an online content recommendation platform worldwide. It offers Outbrain Engage, a product suite for media partners that provides personalized feeds and data-driven recommendations, as well as a solution to maximize user engagement. The company’s Outbrain Engage solution also includes a web-based dashboard to manage and control various aspects of the platform, including content, formats, sources, frequency, and categories of ads delivered on their properties, as well as monetizes the content through customized data-driven advertising. It also provides Outbrain Amplify, a product suite for advertisers that provides an open web platform that helps users to connect with audiences on premium digital properties. The company’s Outbrain Amplify solution also provides advertisers with access to ad inventory that support various formats, including text and image, video, interactive carousel, app install, and other forms of direct response; and ads optimized for engagement. Outbrain Inc. was incorporated in 2006 and is headquartered in New York, New York.
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