Netflix (NFLX) vs. Yelp (YELP) Financial Contrast

Netflix (NASDAQ: NFLX) and Yelp (NYSE:YELP) are both mid-cap technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, analyst recommendations, earnings, dividends and profitability.

Valuation & Earnings

This table compares Netflix and Yelp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Netflix $8.83 billion 10.41 $186.67 million $0.99 214.67
Yelp $713.07 million 5.03 -$4.67 million $0.23 188.22

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

Profitability

This table compares Netflix and Yelp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Netflix 4.04% 14.56% 2.87%
Yelp 2.31% 2.20% 2.00%

Volatility & Risk

Netflix has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Yelp has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Insider & Institutional Ownership

83.3% of Netflix shares are owned by institutional investors. Comparatively, 85.7% of Yelp shares are owned by institutional investors. 4.9% of Netflix shares are owned by company insiders. Comparatively, 10.1% of Yelp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Netflix and Yelp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Netflix 1 15 32 0 2.65
Yelp 1 15 19 0 2.51

Netflix presently has a consensus target price of $210.11, suggesting a potential downside of 1.13%. Yelp has a consensus target price of $43.88, suggesting a potential upside of 1.37%. Given Yelp’s higher probable upside, analysts plainly believe Yelp is more favorable than Netflix.

Summary

Netflix beats Yelp on 11 of the 14 factors compared between the two stocks.

Netflix Company Profile

Netflix, Inc. is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States. The Domestic DVD segment includes services, such as digital optical disc (DVD)-by-mail. The Company’s members can watch original series, documentaries, feature films, as well as television shows and movies directly on their Internet-connected screen, televisions, computers and mobile devices. It offers its streaming services both domestically and internationally. In the United States, its members can receive DVDs delivered to their homes. The Company had members streaming in over 190 countries, as of December 31, 2016.

Yelp Company Profile

Yelp Inc. (Yelp) connects people with local businesses by bringing ‘word of mouth’ online and providing a platform for businesses and consumers to engage and transact. The Company offers local business review sites. Yelp provides a platform for consumers to share their everyday local business experiences with other consumers by posting reviews, tips, photos and videos, and to engage directly with businesses, through reviews, its Request-A-Quote and Message the Business features, and by completing transactions on the Yelp Platform. Yelp also provides businesses of all sizes with a range of free and paid services that help them engage with consumers. The Yelp Platform allows consumers to transact with local businesses directly on Yelp through Yelp Reservations, its online reservations product, and integrations with partners ranging from Shoptiques.com (boutique shopping) to GolfNow (tee time booking) to BloomNation (flower ordering).

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