Alphabet (NASDAQ:GOOGL – Get Free Report) and Snap (NYSE:SNAP – Get Free Report) are both large-cap communication services companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.
Volatility & Risk
Alphabet has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Snap has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Alphabet and Snap, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alphabet | 0 | 5 | 45 | 5 | 3.00 |
| Snap | 2 | 23 | 11 | 1 | 2.30 |
Alphabet presently has a consensus target price of $412.51, indicating a potential upside of 43.16%. Snap has a consensus target price of $7.31, indicating a potential upside of 45.43%. Given Snap’s higher possible upside, analysts plainly believe Snap is more favorable than Alphabet.
Valuation and Earnings
This table compares Alphabet and Snap”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Alphabet | $402.84 billion | 8.75 | $132.17 billion | $19.16 | 15.04 |
| Snap | $5.93 billion | 1.43 | -$460.49 million | ($0.09) | -55.83 |
Alphabet has higher revenue and earnings than Snap. Snap is trading at a lower price-to-earnings ratio than Alphabet, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Alphabet and Snap’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alphabet | 50.03% | 43.33% | 29.24% |
| Snap | -2.30% | -7.21% | -2.00% |
Institutional & Insider Ownership
40.0% of Alphabet shares are owned by institutional investors. Comparatively, 47.5% of Snap shares are owned by institutional investors. 11.6% of Alphabet shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
Alphabet beats Snap on 11 of the 13 factors compared between the two stocks.
About Alphabet
Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.
About Snap
Snap Inc. operates as a technology company in North America, Europe, and internationally. The company offers Snapchat, a visual messaging application with various tabs, such as camera, visual messaging, snap map, stories, and spotlight that enable people to communicate visually through short videos and images. It also provides Spectacles, an eyewear product that connects with Snapchat and captures photos and video from a human perspective; and advertising products, including AR ads and Snap ads comprises a single image or video ads, collection ads, dynamic ads, story ads, and commercials. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California.
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