Head-To-Head Review: Leaf Group (LFGR) versus Its Competitors

Leaf Group (NYSE: LFGR) is one of 43 public companies in the “Internet Services” industry, but how does it weigh in compared to its peers? We will compare Leaf Group to similar businesses based on the strength of its institutional ownership, earnings, analyst recommendations, valuation, risk, profitability and dividends.

Insider and Institutional Ownership

63.4% of Leaf Group shares are held by institutional investors. Comparatively, 73.6% of shares of all “Internet Services” companies are held by institutional investors. 47.6% of Leaf Group shares are held by company insiders. Comparatively, 20.9% of shares of all “Internet Services” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Leaf Group and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leaf Group -25.98% -44.59% -34.40%
Leaf Group Competitors 0.49% 40.76% 7.31%

Volatility & Risk

Leaf Group has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, Leaf Group’s peers have a beta of 1.42, suggesting that their average share price is 42% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Leaf Group and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leaf Group 0 1 4 0 2.80
Leaf Group Competitors 395 1520 2514 93 2.51

Leaf Group presently has a consensus target price of $10.30, suggesting a potential upside of 31.21%. As a group, “Internet Services” companies have a potential upside of 3.09%. Given Leaf Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Leaf Group is more favorable than its peers.

Earnings & Valuation

This table compares Leaf Group and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Leaf Group $113.45 million -$2.01 million -4.97
Leaf Group Competitors $954.98 million $110.67 million 607.12

Leaf Group’s peers have higher revenue and earnings than Leaf Group. Leaf Group is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Leaf Group peers beat Leaf Group on 8 of the 12 factors compared.

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.

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