Financial Analysis: Tucows (TCX) versus WebMD Health Corp (WBMD)

Tucows (NASDAQ: TCX) and WebMD Health Corp (NASDAQ:WBMD) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Tucows and WebMD Health Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tucows 6.06% 41.65% 6.52%
WebMD Health Corp 12.56% 23.67% 5.45%

Analyst Ratings

This is a summary of current recommendations for Tucows and WebMD Health Corp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tucows 0 0 0 0 N/A
WebMD Health Corp 0 6 2 0 2.25

WebMD Health Corp has a consensus target price of $64.00, indicating a potential downside of 3.73%. Given WebMD Health Corp’s higher possible upside, analysts plainly believe WebMD Health Corp is more favorable than Tucows.

Valuation & Earnings

This table compares Tucows and WebMD Health Corp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tucows $251.66 million 2.39 $29.37 million $1.43 40.03
WebMD Health Corp $708.99 million 3.42 $184.52 million $1.93 34.45

WebMD Health Corp has higher revenue and earnings than Tucows. WebMD Health Corp is trading at a lower price-to-earnings ratio than Tucows, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Tucows has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, WebMD Health Corp has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Institutional & Insider Ownership

42.9% of Tucows shares are owned by institutional investors. Comparatively, 91.0% of WebMD Health Corp shares are owned by institutional investors. 13.2% of Tucows shares are owned by company insiders. Comparatively, 5.6% of WebMD Health Corp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

WebMD Health Corp beats Tucows on 8 of the 13 factors compared between the two stocks.

Tucows Company Profile

Tucows Inc. is engaged in providing Internet services. The Company’s segments include Network Access Services and Domain Services. The Network Access Services segment includes mobile, fixed high-speed Internet access services, Internet hosting and network consulting services. The Domain Services segment wholesale and retail domain name registration services, value added services and portfolio services. The Company focuses on serving the needs of this network of resellers by providing services, interfaces, proactive and attentive customer service, reseller-oriented technology and agile design and development processes. The Company focuses its service offerings under brands, including OpenSRS, YummyNames, Platypus, Hover and Ting. As of December 31, 2016, the OpenSRS Domain Service managed 15 million domain names under the Tucows ICANN registrar accreditation and for other registrars. As of December 31, 2016, Ting managed mobile telephony services for approximately 151,000 subscribers.

WebMD Health Corp Company Profile

WebMD Health Corp. is a provider of health information services. The Company provides its services to consumers, physicians and other healthcare professionals through its Websites, mobile applications and health-focused publications. Advertisers and sponsors use The WebMD Health Network to reach and engage healthcare professionals and consumers who are interested in healthy living, wellness, diseases and conditions, and other health-related topics. It also markets services under the WebMD Health Services brand that help employers and health plans improve the health and wellness of their employee and plan participant populations. The WebMD Health Network includes www.WebMD.com, its primary Website for consumers and related mobile applications; www.Medscape.com, its primary Website for physicians and other healthcare professionals and related mobile applications; and other Websites through which it provides its branded health and wellness content, tools and services.

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