Comparing ZipRecruiter (NYSE:ZIP) & Yelp (NYSE:YELP)

Yelp (NYSE:YELP) and ZipRecruiter (NYSE:ZIP) are both small-cap communication services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Institutional & Insider Ownership

90.1% of Yelp shares are held by institutional investors. Comparatively, 70.6% of ZipRecruiter shares are held by institutional investors. 8.3% of Yelp shares are held by company insiders. Comparatively, 19.9% of ZipRecruiter shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Yelp and ZipRecruiter’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yelp	8.59%	19.52%	13.44%
ZipRecruiter	6.20%	N/A	-3.73%

Risk and Volatility

Yelp has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500. Comparatively, ZipRecruiter has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Yelp and ZipRecruiter, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yelp	3	2	1	1	2.00
ZipRecruiter	0	4	0	0	2.00

Yelp currently has a consensus target price of $25.57, indicating a potential upside of 25.22%. ZipRecruiter has a consensus target price of $4.17, indicating a potential upside of 3.65%. Given Yelp’s higher possible upside, analysts plainly believe Yelp is more favorable than ZipRecruiter.

Valuation & Earnings

This table compares Yelp and ZipRecruiter”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yelp	$1.46 billion	0.76	$145.60 million	$2.09	9.77
ZipRecruiter	$448.95 million	0.74	-$32.99 million	$0.35	11.49

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

Summary

Yelp beats ZipRecruiter on 11 of the 14 factors compared between the two stocks.

About Yelp

Yelp Inc. operates a platform that connects consumers with local businesses in the United States and internationally. The company's platform covers various categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services. It provides free and paid advertising products to businesses, which include cost-per-click advertising and multi-location Ad products, as well as enables businesses to deliver targeted advertising to large and high-intent audience; and business listing page products. The company also offers other services comprising Yelp Guest Manager, a subscription-based suite of front-of-house management tools for restaurants, nightlife and certain other venues, which include online reservations, a waitlist management solution that allows consumers to check wait times and join waitlists remotely, as well as through hostless kiosks, and seating and server rotation management tools; Yelp Knowledge program that offers business owners local analytics and insights through access to its historical data and other proprietary content; and Yelp Fusion, which offers free access to various basic information through publicly available APIs, and paid access to content and data for consumer-facing enterprise use. In addition, it provides content licensing, as well as allows third-party data providers to update and manage business listing information on behalf of businesses. Further, the company offers its products directly through its sales force; indirectly through partners; and online through its website and business app, as well as non-advertising partner arrangements. It has partnership with Grubhub for providing consumers with a service to place food orders for pickup and delivery. The company was incorporated in 2004 and is based in San Francisco, California.

About ZipRecruiter

ZipRecruiter, Inc. operates an online employment marketplace that connects job seekers and employers. Its platform provides various solutions, such as job posting, online interviews, job alerts, match scores, and application updates. The company was incorporated in 2010 and is based in Santa Monica, California.