Analyzing Teads (NASDAQ:TEAD) and ADTRAN (NASDAQ:ADTN)

Teads (NASDAQ:TEAD) and ADTRAN (NASDAQ:ADTN) 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 analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Risk and Volatility

Teads has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500. Comparatively, ADTRAN has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Insider and Institutional Ownership

60.4% of Teads shares are owned by institutional investors. Comparatively, 80.6% of ADTRAN shares are owned by institutional investors. 21.9% of Teads shares are owned by insiders. Comparatively, 1.5% of ADTRAN shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Teads and ADTRAN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Teads	-5.76%	-4.37%	-1.41%
ADTRAN	-11.02%	-10.09%	-1.35%

Valuation and Earnings

This table compares Teads and ADTRAN”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Teads	$889.88 million	0.17	-$710,000.00	($0.84)	-1.94
ADTRAN	$922.72 million	0.85	-$459.89 million	($1.31)	-7.44

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Teads and ADTRAN, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Teads	0	1	2	0	2.67
ADTRAN	0	1	4	0	2.80

Teads currently has a consensus target price of $3.97, indicating a potential upside of 143.35%. ADTRAN has a consensus target price of $12.00, indicating a potential upside of 23.08%. Given Teads’ higher possible upside, research analysts plainly believe Teads is more favorable than ADTRAN.

About Teads

Outbrain Inc., together with its subsidiaries, operates an online content recommendation platform worldwide. It offers Outbrain Engage, a product suite for media partners that provides personalized feeds and data-driven recommendations, as well as a solution to maximize user engagement. The company’s Outbrain Engage solution also includes a web-based dashboard to manage and control various aspects of the platform, including content, formats, sources, frequency, and categories of ads delivered on their properties, as well as monetizes the content through customized data-driven advertising. It also provides Outbrain Amplify, a product suite for advertisers that provides an open web platform that helps users to connect with audiences on premium digital properties. The company’s Outbrain Amplify solution also provides advertisers with access to ad inventory that support various formats, including text and image, video, interactive carousel, app install, and other forms of direct response; and ads optimized for engagement. Outbrain Inc. was incorporated in 2006 and is headquartered in New York, New York.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.