Connecture (NASDAQ: CNXR) and IAC/InterActiveCorp (NASDAQ:IAC) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Institutional & Insider Ownership

40.0% of Connecture shares are held by institutional investors. Comparatively, 83.4% of IAC/InterActiveCorp shares are held by institutional investors. 58.1% of Connecture shares are held by company insiders. Comparatively, 11.3% of IAC/InterActiveCorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Connecture and IAC/InterActiveCorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Connecture -27.72% N/A -25.00%
IAC/InterActiveCorp -0.76% 8.43% 3.58%

Analyst Recommendations

This is a summary of current ratings and target prices for Connecture and IAC/InterActiveCorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Connecture 0 2 0 0 2.00
IAC/InterActiveCorp 0 1 18 0 2.95

Connecture currently has a consensus target price of $2.00, suggesting a potential upside of 233.33%. IAC/InterActiveCorp has a consensus target price of $98.44, suggesting a potential downside of 6.56%. Given Connecture’s higher possible upside, equities analysts plainly believe Connecture is more favorable than IAC/InterActiveCorp.

Volatility and Risk

Connecture has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500. Comparatively, IAC/InterActiveCorp has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Earnings and Valuation

This table compares Connecture and IAC/InterActiveCorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Connecture $82.61 million 0.16 -$11.31 million ($1.19) -0.50
IAC/InterActiveCorp $3.08 billion 2.69 $432.39 million ($0.49) -215.02

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

Summary

IAC/InterActiveCorp beats Connecture on 10 of the 13 factors compared between the two stocks.

About Connecture

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.

About IAC/InterActiveCorp

IAC/InterActiveCorp (IAC) is a media and Internet company. The Company’s brands include HomeAdvisor, Vimeo, Dictionary.com and Match Group’s online dating portfolio, which includes Tinder, PlentyOfFish and OkCupid. Its segments include Match Group, HomeAdvisor, Video, Applications and Publishing. Match Group includes the dating and non-dating businesses of Match Group, Inc. HomeAdvisor is a home services digital marketplace that helps connect consumers with home professionals in North America, as well as in France, the Netherlands and Italy under various brands. Its Video consists of Vimeo, Electus, CollegeHumor, Notional, IAC Films and Daily Burn. Applications consists of Consumer, which include its direct-to-consumer downloadable desktop applications, Apalon, which houses its mobile applications and SlimWare, and Partnerships, which includes its business-to-business partnership operations. Publishing consists of Premium Brands business, and Ask & Other business.

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