Critical Review: XO Group (XOXO) and Autobytel (AUTO)

XO Group (NYSE: XOXO) and Autobytel (NASDAQ:AUTO) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Institutional & Insider Ownership

83.3% of XO Group shares are held by institutional investors. Comparatively, 57.6% of Autobytel shares are held by institutional investors. 6.8% of XO Group shares are held by company insiders. Comparatively, 20.7% of Autobytel shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares XO Group and Autobytel’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
XO Group $155.73 million 3.20 $14.12 million $0.27 73.89
Autobytel N/A N/A N/A $0.37 19.08

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

Profitability

This table compares XO Group and Autobytel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XO Group 4.55% 4.71% 3.89%
Autobytel 3.15% 10.96% 8.20%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for XO Group and Autobytel, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XO Group 0 3 2 0 2.40
Autobytel 0 1 1 0 2.50

XO Group presently has a consensus price target of $20.05, suggesting a potential upside of 0.50%. Autobytel has a consensus price target of $12.00, suggesting a potential upside of 69.97%. Given Autobytel’s stronger consensus rating and higher possible upside, analysts clearly believe Autobytel is more favorable than XO Group.

Volatility & Risk

XO Group has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Autobytel has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Summary

Autobytel beats XO Group on 7 of the 12 factors compared between the two stocks.

About XO Group

XO Group Inc. is engaged in providing content and marketing solutions, targeted advertising programs, transactions and merchandise. The Company’s multi-platform brands guide couples through transformative life stages from getting married with The Knot, to moving in together with The Nest, to having a baby with The Bump, and helping bring celebrations to life with entertainment vendors from GigMasters.com Incorporated (GigMasters). The Knot is the wedding resource and marketplace that engages, matches and connects couples. The Bump is a pregnancy and parenting brand, providing personalized information, content and tools. The Nest is a brand focused on nesters setting up homes and navigating their lives together. GigMasters is an event marketplace for finding and booking the entertainment and vendors for birthday parties, weddings, anniversaries and corporate events, among others. The Company’s product offerings include Online Media Advertising, Transactions, and Publishing and Other.

About Autobytel

AutoWeb, Inc., formerly Autobytel Inc., is an automotive marketing services company that assists automotive retail dealers and automotive manufacturers market and sell new and used vehicles to consumers through the programs for online lead referrals, dealer marketing products and services, and online advertising programs and mobile products. The Company operates through providing automotive marketing services segment. Its consumer-facing automotive Websites, including Website Autobytel.com, provide consumers with information and tools to aid them with the automotive purchase decisions and ability to submit inquiries requesting dealers to contact the consumers regarding purchasing or leasing vehicles. Its AutoWeb pay-per-click advertising marketplace program uses technology to refer consumer traffic to dealers and manufacturer Websites.

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