Critical Review: 58.com (WUBA) vs. Connecture (OTCMKTS:CNXR)

Connecture (OTCMKTS: CNXR) and 58.com (NYSE:WUBA) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for Connecture and 58.com, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Connecture 0 0 0 0 N/A
58.com 2 3 5 0 2.30

58.com has a consensus target price of $50.63, indicating a potential downside of 38.16%. Given 58.com’s higher probable upside, analysts clearly believe 58.com is more favorable than Connecture.

Institutional and Insider Ownership

38.8% of Connecture shares are held by institutional investors. Comparatively, 60.6% of 58.com shares are held by institutional investors. 68.6% of Connecture shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Connecture and 58.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Connecture -0.83% N/A -0.81%
58.com 7.93% 4.08% 2.80%

Valuation and Earnings

This table compares Connecture and 58.com’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Connecture $81.89 million 0.10 -$26.53 million ($0.67) -0.51
58.com $1.14 billion 10.50 -$110.71 million $0.77 106.32

Connecture has higher earnings, but lower revenue than 58.com. Connecture is trading at a lower price-to-earnings ratio than 58.com, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Connecture has a beta of 1.93, meaning that its share price is 93% more volatile than the S&P 500. Comparatively, 58.com has a beta of 2.15, meaning that its share price is 115% more volatile than the S&P 500.

Summary

58.com beats Connecture on 11 of the 13 factors compared between the two stocks.

About Connecture

Connecture, Inc. provides a Web-based consumer shopping, enrollment and retention platform for health insurance distribution. The Company caters its services to health insurance marketplace operators, such as health plans, brokers and exchange operators. It operates through four segments: Enterprise/Commercial, Enterprise/State, Medicare and Private Exchange. The Enterprise/Commercial segment offers insurance distribution solutions to health plans. The Enterprise/State segment offers the sales automation solutions to state Governments, which allow its customers to offer customized individual and small group exchanges. The Medicare segment offers Web-based Medicare plan comparison, prescription drug comparison and enrollment tools for health plans, pharmacy benefit managers, pharmacies, field marketing organizations and call centers. The Private Exchange segment offers defined-contribution benefit exchange solutions to benefit consultants, brokers, exchange operators and aggregators.

About 58.com

58.com Inc. is a holding company. The Company’s business consists of its online classifieds and listing platforms. Its online classifieds and listings platforms enable local merchants and consumers to connect, share information and conduct business in China. These platforms include 58, Ganji and Anjuke. 58 and Ganji are online multi-content category-classified advertising platforms, while Anjuke is an online real estate listing platform. In addition, 58 Daojia Inc., its subsidiary, operates a mobile-based closed-loop transactional platform for home services, which directly connects consumers and individual service providers for local services, such as home cleaning, moving services and manicure services provided at home. Its classifieds and listing platforms contain local information for over 480 cities across various content categories, including jobs, real estate, used goods, automotive and yellow pages. It also offers membership, online marketing services and e-commerce services.

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