Tremor Video (NYSE: TRMR) and Rocket Fuel (NASDAQ:FUEL) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, dividends, earnings, risk and profitability.

Risk & Volatility

Tremor Video has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, Rocket Fuel has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Institutional & Insider Ownership

36.5% of Tremor Video shares are held by institutional investors. Comparatively, 33.6% of Rocket Fuel shares are held by institutional investors. 8.2% of Tremor Video shares are held by insiders. Comparatively, 34.9% of Rocket Fuel shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Tremor Video and Rocket Fuel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tremor Video -7.11% -16.72% -8.96%
Rocket Fuel -16.39% -54.16% -14.86%

Earnings and Valuation

This table compares Tremor Video and Rocket Fuel’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tremor Video $185.36 million 0.68 -$3.77 million ($0.27) -9.30
Rocket Fuel $420.47 million 0.29 -$16.55 million ($1.50) -1.73

Tremor Video has higher revenue, but lower earnings than Rocket Fuel. Tremor Video is trading at a lower price-to-earnings ratio than Rocket Fuel, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Tremor Video and Rocket Fuel, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tremor Video 0 1 2 0 2.67
Rocket Fuel 1 3 0 0 1.75

Tremor Video currently has a consensus target price of $3.13, suggesting a potential upside of 24.50%. Rocket Fuel has a consensus target price of $3.48, suggesting a potential upside of 33.65%. Given Rocket Fuel’s higher probable upside, analysts plainly believe Rocket Fuel is more favorable than Tremor Video.

Summary

Tremor Video beats Rocket Fuel on 10 of the 13 factors compared between the two stocks.

About Tremor Video

Tremor Video, Inc. is an advertising technology company. The Company provides software for video advertising effectiveness. The Company operates through online video advertising services segment. Its technology optimizes performance of video advertisement campaigns across all screens, including computers, smartphones, tablets and connected televisions. The Company’s buyer platform enables advertisers, agencies and other buyers of advertising to discover, buy, optimize and measure the effectiveness of their video advertisement campaigns. The Company’s technology analyzes video content, detects viewer and system attributes, and uses its repository of stored third-party data to optimize and target the delivery of advertisement campaigns. Its buyers can transact directly on its buyer platform through the Tremor Video DSP, a user interface that allows them to manage the execution of their campaigns on a programmatic basis. The Company also offers a seller platform, the Tremor Video SSP.

About Rocket Fuel

Rocket Fuel Inc. is a technology company, which offers a Programmatic Marketing Platform that is designed for helping marketers and their agencies to connect with consumers through digital media. The Company’s service offerings are organized around platforms, including Data Management Platform (DMP) and Demand Side Platform (DSP), which are used by customers themselves or integrating with other customer relationship management or marketing platforms, and together in various permutations as its Programmatic Marketing Platform. The integrated platform is designed to deliver and optimize media spend to engage, upsell and retarget consumers across addressable channels, including display, mobile and video, and across addressable devices, such as tablets, set top boxes, television and mobile phones. It offers Programmatic Marketing Platform as a managed service, which it operate on behalf of its customers, and as a self-service platform operated by its customers or their agencies directly.

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