Care.com (NYSE: CRCM) and Weibo Corporation (NASDAQ:WB) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, dividends, institutional ownership, profitabiliy and analyst recommendations.
Risk and Volatility
Care.com has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Weibo Corporation has a beta of 2.66, suggesting that its stock price is 166% more volatile than the S&P 500.
Institutional and Insider Ownership
72.5% of Care.com shares are held by institutional investors. Comparatively, 16.8% of Weibo Corporation 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, large money managers and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Care.com and Weibo Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Care.com | 0.67% | 3.79% | 1.82% |
| Weibo Corporation | 20.10% | 20.00% | 14.53% |
Earnings & Valuation
This table compares Care.com and Weibo Corporation’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Care.com | $165.85 million | 2.66 | $7.41 million | ($0.04) | -375.16 |
| Weibo Corporation | $735.71 million | 24.58 | $201.92 million | $0.66 | 132.17 |
Weibo Corporation has higher revenue and earnings than Care.com. Care.com is trading at a lower price-to-earnings ratio than Weibo Corporation, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Care.com and Weibo Corporation, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Care.com | 0 | 1 | 0 | 0 | 2.00 |
| Weibo Corporation | 0 | 1 | 8 | 0 | 2.89 |
Care.com currently has a consensus target price of $14.00, suggesting a potential downside of 6.73%. Weibo Corporation has a consensus target price of $64.44, suggesting a potential downside of 26.12%. Given Care.com’s higher probable upside, equities analysts clearly believe Care.com is more favorable than Weibo Corporation.
Summary
Weibo Corporation beats Care.com on 10 of the 14 factors compared between the two stocks.
About Care.com
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.
About Weibo Corporation
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Weibo Corporation is a social media platform for people to create, distribute and discover Chinese-language content. The Company provides ways for people and organizations to publicly express themselves in real time, interact with others on a global platform and stay connected with the world. It operates in two segments: advertising and marketing services and other services. It offers self-expression products that enable its users to express themselves on its platform; social products to promote social interaction between users on its platform; discovery products to help users discover content on its platform, and notifications to notify users on Weibo account activities through short message service (SMS) or push notification on their device. It offers advertising and marketing solutions to enable its customers to promote their brands and conduct marketing activities. It offers its platform partners with tools and application programming interfaces (APIs).
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