Head-To-Head Contrast: Snap (NYSE:SNAP) and Alphabet (NASDAQ:GOOGL)

Snap (NYSE:SNAP) and Alphabet (NASDAQ:GOOGL) are both large-cap communication services companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Snap and Alphabet, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Snap	2	23	11	1	2.30
Alphabet	0	5	45	5	3.00

Snap presently has a consensus target price of $7.31, indicating a potential upside of 45.43%. Alphabet has a consensus target price of $412.51, indicating a potential upside of 43.16%. Given Snap’s higher probable upside, equities research analysts plainly believe Snap is more favorable than Alphabet.

Institutional and Insider Ownership

47.5% of Snap shares are held by institutional investors. Comparatively, 40.0% of Alphabet shares are held by institutional investors. 11.6% of Alphabet shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Snap and Alphabet”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Snap	$5.93 billion	1.43	-$460.49 million	($0.09)	-55.83
Alphabet	$402.84 billion	8.75	$132.17 billion	$19.16	15.04

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

Risk & Volatility

Snap has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Alphabet has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.

Profitability

This table compares Snap and Alphabet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Snap	-2.30%	-7.21%	-2.00%
Alphabet	50.03%	43.33%	29.24%

Summary

Alphabet beats Snap on 11 of the 13 factors compared between the two stocks.

About Snap

Snap Inc. operates as a technology company in North America, Europe, and internationally. The company offers Snapchat, a visual messaging application with various tabs, such as camera, visual messaging, snap map, stories, and spotlight that enable people to communicate visually through short videos and images. It also provides Spectacles, an eyewear product that connects with Snapchat and captures photos and video from a human perspective; and advertising products, including AR ads and Snap ads comprises a single image or video ads, collection ads, dynamic ads, story ads, and commercials. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California.

About Alphabet

Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.