System1 (NYSE:SST – Get Free Report) and Taboola.com (NASDAQ:TBLA – Get Free Report) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.
Insider and Institutional Ownership
87.5% of System1 shares are owned by institutional investors. Comparatively, 42.9% of Taboola.com shares are owned by institutional investors. 13.2% of System1 shares are owned by insiders. Comparatively, 24.7% of Taboola.com shares are owned 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.
Valuation and Earnings
This table compares System1 and Taboola.com”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| System1 | $333.52 million | 0.12 | -$227.22 million | ($1.12) | -0.38 |
| Taboola.com | $1.78 billion | 0.64 | -$82.04 million | $0.04 | 89.00 |
Taboola.com has higher revenue and earnings than System1. System1 is trading at a lower price-to-earnings ratio than Taboola.com, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares System1 and Taboola.com’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| System1 | -24.18% | -68.85% | -18.27% |
| Taboola.com | -1.96% | -1.68% | -1.04% |
Analyst Recommendations
This is a breakdown of current ratings for System1 and Taboola.com, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| System1 | 0 | 0 | 1 | 0 | 3.00 |
| Taboola.com | 0 | 2 | 4 | 0 | 2.67 |
System1 currently has a consensus target price of $5.00, indicating a potential upside of 1,060.09%. Taboola.com has a consensus target price of $4.25, indicating a potential upside of 19.38%. Given System1’s stronger consensus rating and higher probable upside, equities research analysts clearly believe System1 is more favorable than Taboola.com.
Risk and Volatility
System1 has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Taboola.com has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.
Summary
Taboola.com beats System1 on 10 of the 14 factors compared between the two stocks.
About System1
System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.
About Taboola.com
Taboola.com Ltd., together with its subsidiaries, operates an artificial intelligence-based algorithmic engine platform in Israel, the United States, the United Kingdom, Germany, and internationally. It offers Taboola, a platform that partners with websites, devices, and mobile apps to recommend editorial content and advertisements on the open web to users. The company was incorporated in 2006 and is headquartered in New York, New York.
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