Leaf Group (NYSE: DMD) and Bitauto Holdings Limited (NYSE:BITA) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Institutional and Insider Ownership

58.8% of Leaf Group shares are held by institutional investors. Comparatively, 18.5% of Bitauto Holdings Limited shares are held by institutional investors. 44.0% of Leaf Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Leaf Group and Bitauto Holdings Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leaf Group 0 1 2 0 2.67
Bitauto Holdings Limited 0 0 2 0 3.00

Leaf Group currently has a consensus price target of $8.50, suggesting a potential upside of 33.86%. Bitauto Holdings Limited has a consensus price target of $34.00, suggesting a potential downside of 10.24%. Given Leaf Group’s higher possible upside, equities research analysts plainly believe Leaf Group is more favorable than Bitauto Holdings Limited.

Risk and Volatility

Leaf Group has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Bitauto Holdings Limited has a beta of 3.06, indicating that its stock price is 206% more volatile than the S&P 500.

Earnings and Valuation

This table compares Leaf Group and Bitauto Holdings Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Leaf Group N/A N/A N/A ($0.24) -26.46
Bitauto Holdings Limited $926.74 million 3.14 $95.77 million ($1.07) -35.40

Bitauto Holdings Limited has higher revenue and earnings than Leaf Group. Bitauto Holdings Limited is trading at a lower price-to-earnings ratio than Leaf Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Leaf Group and Bitauto Holdings Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leaf Group -31.38% -52.73% -41.29%
Bitauto Holdings Limited -5.11% 3.28% 1.52%

Summary

Bitauto Holdings Limited beats Leaf Group on 6 of the 10 factors compared between the two stocks.

About Leaf Group

Leaf Group Ltd., formerly Demand Media, Inc., is diversified Internet marketplaces and media company. The Company has online media properties and marketplace platforms that enable communities of creators to reach audiences in lifestyle categories. The Company operates an online studio platform for the professional creation and distribution of content, as well as two online artist marketplaces. Its business comprises two service offerings: Content & Media and Marketplaces. The Company creates media content, including text articles, videos, photographs and designed visual formats, and publishes such content to its owned and operated online properties and to its customers’ online properties. The Company also offers its content creation and distribution platform to provide custom content and other content marketing solutions to brands, publishers and advertisers.

About Bitauto Holdings Limited

Bitauto Holdings Limited is a provider of Internet content and marketing services for China’s automotive industry. The Company’s bitauto.com and taoche.com Websites provide consumers with information on new and used automobile pricing, and promotional information, specifications, reviews and consumer feedback. The Company operates through three segments: advertising business, EP platform business and digital marketing solutions business. The advertising business offers a range of advertising services mainly to automakers through its Websites, as well as mobile applications. The EP platform business provides Web-based and mobile-based integrated digital marketing solutions to automobile customers in China. The digital marketing solutions business provides automakers with digital marketing solutions, including Website creation and maintenance, online public relations, online marketing campaigns and advertising agent services.

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