Care.com (CRCM) and Weight Watchers (WTW) Critical Comparison

Care.com (NYSE: CRCM) and Weight Watchers (NYSE:WTW) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

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72.5% of Care.com shares are held by institutional investors. Comparatively, 92.1% of Weight Watchers shares are held by institutional investors. 30.9% of Care.com shares are held by insiders. Comparatively, 12.3% of Weight Watchers shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Care.com and Weight Watchers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Care.com 0 1 1 0 2.50
Weight Watchers 1 0 3 0 2.50

Care.com presently has a consensus target price of $18.00, suggesting a potential upside of 10.02%. Weight Watchers has a consensus target price of $72.00, suggesting a potential upside of 10.13%. Given Weight Watchers’ higher probable upside, analysts clearly believe Weight Watchers is more favorable than Care.com.

Profitability

This table compares Care.com and Weight Watchers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Care.com 6.13% 16.30% 7.27%
Weight Watchers 12.52% -10.38% 9.01%

Risk & Volatility

Care.com has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, Weight Watchers has a beta of 3.22, meaning that its share price is 222% more volatile than the S&P 500.

Earnings and Valuation

This table compares Care.com and Weight Watchers’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Care.com $174.09 million 2.86 $10.66 million $0.27 60.59
Weight Watchers $1.31 billion 3.24 $163.51 million $1.65 39.62

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

Summary

Weight Watchers beats Care.com on 10 of the 13 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 Weight Watchers

Weight Watchers International, Inc. provides weight management services worldwide. The company operates in four segments: North America, United Kingdom, Continental Europe, and Other. It offers a range of products and services comprising nutritional, activity, behavioral, and lifestyle tools and approaches. The company also engages in the meetings business, which presents weight management programs, as well as allows members to support each other by sharing their experiences with other people experiencing similar weight management challenges. In addition, it offers various digital subscription products, including Weight Watchers OnlinePlus and a weight management companion for Weight Watchers meeting members to digitally manage the day-to-day aspects of their weight management plan, as well as provides interactive and personalized resources that allow users to follow weight management plan; and personal coaching products. Further, the company provides various products, including bars, snacks, cookbooks, food, and restaurant guides with SmartPoints values, Weight Watchers magazines, and other third-party products. Additionally, it licenses the Weight Watchers brand and other intellectual property in food, beverages, and other consumer products and services, as well as endorses selected branded consumer products; and engages in publishing magazines, as well issues other publications, such as cookbooks, and food and restaurant guides with SmartPoints values. It offers products through its meeting and franchisee business, as well as online. Weight Watchers International, Inc. was founded in 1961 and is headquartered in New York, New York.

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