Leaf Group (LFGR) & Care.com (CRCM) Critical Comparison

Leaf Group (NASDAQ: LFGR) and Care.com (NYSE:CRCM) are both small-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Leaf Group and Care.com, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leaf Group 0 1 4 0 2.80
Care.com 0 1 1 0 2.50

Leaf Group presently has a consensus price target of $10.30, suggesting a potential upside of 38.26%. Care.com has a consensus price target of $14.00, suggesting a potential downside of 14.74%. Given Leaf Group’s stronger consensus rating and higher possible upside, research analysts plainly believe Leaf Group is more favorable than Care.com.

Valuation and Earnings

This table compares Leaf Group and Care.com’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Leaf Group $117.85 million 1.29 -$21.14 million N/A N/A
Care.com $169.64 million 2.88 $8.45 million $0.10 164.22

Care.com has higher revenue and earnings than Leaf Group.

Profitability

This table compares Leaf Group and Care.com’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%
Care.com 3.66% 10.98% 4.67%

Institutional & Insider Ownership

73.7% of Care.com shares are held by institutional investors. 24.7% of Care.com shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Care.com beats Leaf Group on 8 of the 11 factors compared between the two stocks.

Leaf Group Company Profile

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.

Care.com Company Profile

Care.com, Inc. is an online marketplace for finding and managing family care. As of December 31, 2016, the Company had 22.8 million members, including 12.9 million families and 9.9 million caregivers, spanning 19 countries. Its consumer matching solutions allow families to search for, qualify, vet, connect with and select caregivers. It also provides caregivers with solutions to create personal profiles, describe their skills and experience, and otherwise differentiate and market themselves in a fragmented marketplace. In addition to consumer matching solutions, the Company offers its members products and services to facilitate their interaction with caregivers. It serves employers by providing access to certain of its products and services to employer-sponsored families. In addition, it serves care-related businesses, such as day care centers, nanny agencies and home care agencies, willing to market their services to its care-seeking families and recruit its caregiver members.

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