Geeknet (NASDAQ: GKNT) and CafePress (NASDAQ:PRSS) are both small-cap e-commerce & auction services companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Institutional & Insider Ownership

10.8% of CafePress shares are held by institutional investors. 17.3% of CafePress shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Geeknet and CafePress’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Geeknet N/A N/A N/A ($1.48) -13.50
CafePress $102.21 million 0.29 -$26.47 million ($0.44) -3.95

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

Risk and Volatility

Geeknet has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500. Comparatively, CafePress has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Geeknet and CafePress, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Geeknet 0 0 0 0 N/A
CafePress 0 1 0 0 2.00

CafePress has a consensus price target of $3.50, indicating a potential upside of 101.15%. Given CafePress’ higher probable upside, analysts plainly believe CafePress is more favorable than Geeknet.

Profitability

This table compares Geeknet and CafePress’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Geeknet -20.58% -25.85% -19.84%
CafePress -7.63% -16.72% -13.02%

Summary

CafePress beats Geeknet on 9 of the 9 factors compared between the two stocks.

Geeknet Company Profile

Geeknet, Inc. (Geeknet) sells collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers through the ThinkGeek Website and exclusive products to the Company’s wholesale channel customers. The Company has three segments: Website, Wholesale and ThinkGeek Solutions. The ThinkGeek Solutions segment has been aggregated into the Website segment. The Website segment sells geek-themed retail products and video game-themed merchandise through the ThinkGeek Website and through the ThinkGeek Solutions Web-stores. The Wholesale segment sells primarily exclusive GeekLabs (the in-house product development team) products to brick-and-mortar retailers. The Company along with its subsidiaries, operates a business aimed at the global geek community, which includes technology enthusiasts, pop-culture aficionados and other fans. ThinkGeek, Inc. and ThinkGeek Solutions, Inc. are its two wholly owned subsidiaries.

CafePress Company Profile

CafePress Inc. is an online retailer of personalized products offering various gifts and accessories, including t-shirts and apparel, mugs and drinkware, and home goods, such as custom shower curtains and bed coverings. The Company conducts its business on its primary United States-based domain, CafePress.com, and also operates CafePress branded Websites for the markets in the United Kingdom, Canada and Australia. It also sells CafePress branded products through other online retail partners. Its products are customized with designs contributed through various means, including crowd-sourced user generated content, stock art licenses and licensed content relationships with entertainment companies and brands. Its facility in Louisville, Kentucky has technology and manufacturing processes that enables it to provide customized products that are individually built to order. The Company’s processes enable it to produce a range of merchandise.

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