Adobe Systems (ADBE) vs. YuMe (YUME) Financial Review

YuMe (NYSE: YUME) and Adobe Systems (NASDAQ:ADBE) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares YuMe and Adobe Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
YuMe 5.25% 10.01% 6.37%
Adobe Systems 23.20% 22.57% 13.19%

Analyst Recommendations

This is a breakdown of recent recommendations for YuMe and Adobe Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
YuMe 0 0 0 0 N/A
Adobe Systems 0 7 23 0 2.77

Adobe Systems has a consensus target price of $185.07, suggesting a potential downside of 2.04%. Given Adobe Systems’ higher possible upside, analysts plainly believe Adobe Systems is more favorable than YuMe.

Dividends

YuMe pays an annual dividend of $0.12 per share and has a dividend yield of 2.7%. Adobe Systems does not pay a dividend. YuMe pays out 50.0% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares YuMe and Adobe Systems’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
YuMe $160.41 million 0.97 -$7.72 million $0.24 18.50
Adobe Systems $7.30 billion 12.75 $1.69 billion $3.39 55.73

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

Insider and Institutional Ownership

48.0% of YuMe shares are held by institutional investors. Comparatively, 87.1% of Adobe Systems shares are held by institutional investors. 29.3% of YuMe shares are held by company insiders. Comparatively, 0.4% of Adobe Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

YuMe has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, Adobe Systems has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Summary

Adobe Systems beats YuMe on 13 of the 15 factors compared between the two stocks.

YuMe Company Profile

YuMe, Inc. (YuMe) is an independent provider of multi-screen video advertising technology, connecting brand advertisers, digital media property owners and consumers of video content across a range of Internet-connected devices. The Company operating segments include Domestic and International. The Company offers advertising customers end-to-end marketing solutions by combining data-driven technologies with deep insight into audience behavior. The Company also offers demand-side platform (DSP), called YuMe for Advertisers, to find relevant audiences and deliver targeted advertising, and a supply-side platform (SSP), called YuMe for Publishers (YFP 5.0), which helps aggregate audiences, define audience characteristics and offer monetization opportunities for digital media property owners. Its technologies serve the specific needs of brand advertisers and enable them to find and target brand-receptive audiences across a range of Internet connected devices and digital media properties.

Adobe Systems Company Profile

Adobe Systems Incorporated is a software company. The Company offers products and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and experiences. It operates through three segments: Digital Media, Digital Marketing, and Print and Publishing. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses and enterprises to create, publish, promote and monetize their digital content. Its Digital Marketing segment provides solutions and services for how digital advertising and marketing are created, managed, executed, measured and optimized. Its Print and Publishing segment addresses market opportunities ranging from the diverse authoring and publishing needs of technical and business publishing to its legacy type and original equipment manufacturer (OEM) printing businesses.

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