Comparing XO Group (XOXO) and Marchex (MCHX)

XO Group (NYSE: XOXO) and Marchex (NASDAQ:MCHX) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Profitability

This table compares XO Group and Marchex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XO Group 4.55% 4.71% 3.89%
Marchex -15.53% -10.65% -9.44%

Analyst Ratings

This is a summary of recent ratings and recommmendations for XO Group and Marchex, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XO Group 0 2 3 0 2.60
Marchex 0 1 0 0 2.00

XO Group currently has a consensus target price of $20.15, suggesting a potential upside of 7.24%. Marchex has a consensus target price of $3.00, suggesting a potential downside of 2.28%. Given XO Group’s stronger consensus rating and higher probable upside, analysts clearly believe XO Group is more favorable than Marchex.

Earnings and Valuation

This table compares XO Group and Marchex’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
XO Group $155.73 million 3.01 $14.12 million $0.27 69.60
Marchex $105.54 million 1.11 -$12.35 million ($0.39) -7.87

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

Insider & Institutional Ownership

83.6% of XO Group shares are owned by institutional investors. Comparatively, 49.7% of Marchex shares are owned by institutional investors. 6.8% of XO Group shares are owned by company insiders. Comparatively, 27.4% of Marchex shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

XO Group has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Marchex has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.

Summary

XO Group beats Marchex on 11 of the 13 factors compared between the two stocks.

About XO Group

XO Group Inc. is engaged in providing content and marketing solutions, targeted advertising programs, transactions and merchandise. The Company’s multi-platform brands guide couples through transformative life stages from getting married with The Knot, to moving in together with The Nest, to having a baby with The Bump, and helping bring celebrations to life with entertainment vendors from GigMasters.com Incorporated (GigMasters). The Knot is the wedding resource and marketplace that engages, matches and connects couples. The Bump is a pregnancy and parenting brand, providing personalized information, content and tools. The Nest is a brand focused on nesters setting up homes and navigating their lives together. GigMasters is an event marketplace for finding and booking the entertainment and vendors for birthday parties, weddings, anniversaries and corporate events, among others. The Company’s product offerings include Online Media Advertising, Transactions, and Publishing and Other.

About Marchex

Marchex, Inc. is a mobile advertising analytics company. The Company offers products and services for enterprises that depend on consumer phone calls to drive sales. Its media analytics products can provide actionable intelligence on media channels advertisers use to acquire customers over the phone. Its Marchex Omnichannel Analytics Cloud helps marketers connect customer conversions driven from paid media channels, including search, display and video, social and sites, to phone calls made to a business. Its product offerings include Marchex Call Analytics, Marchex Search Analytics, Marchex Display and Video Analytics, Marchex Social Analytics, Marchex Call Marketplace and Local Leads. Its Local Leads platform is a white-labeled, full service advertising solution for small business resellers, such as Yellow Pages providers and vertical marketing service providers, to sell call advertising, search marketing and other lead generation products.

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