Head to Head Review: Leaf Group (NYSE:LFGR) versus Zynga (ZNGA)

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Leaf Group (NYSE:LFGR) and Zynga (NASDAQ:ZNGA) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Analyst Ratings

This is a summary of current ratings and price targets for Leaf Group and Zynga, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leaf Group 0 0 1 0 3.00
Zynga 2 1 7 0 2.50

Leaf Group currently has a consensus target price of $14.00, suggesting a potential upside of 25.56%. Zynga has a consensus target price of $4.93, suggesting a potential upside of 17.33%. Given Leaf Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe Leaf Group is more favorable than Zynga.

Risk & Volatility

Leaf Group has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Zynga has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500.

Profitability

This table compares Leaf Group and Zynga’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leaf Group -17.25% -34.93% -26.13%
Zynga 4.04% 2.37% 1.98%

Insider & Institutional Ownership

65.7% of Leaf Group shares are owned by institutional investors. Comparatively, 74.6% of Zynga shares are owned by institutional investors. 22.5% of Leaf Group shares are owned by insiders. Comparatively, 11.9% of Zynga shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Leaf Group and Zynga’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Leaf Group $128.99 million 2.16 -$31.13 million N/A N/A
Zynga $861.39 million 4.19 $26.63 million $0.03 140.00

Zynga has higher revenue and earnings than Leaf Group.

Summary

Zynga beats Leaf Group on 8 of the 12 factors compared between the two stocks.

Leaf Group Company Profile

Leaf Group Ltd., together with its subsidiaries, operates as a diversified consumer Internet company worldwide. The company operates in two segments, Marketplaces and Media. The Marketplaces segment offers Society6.com, which provides artists with an online commerce platform to feature and sell their original art and designs on consumer products in the home décor, accessories, and apparel categories; and Deny Designs, an artist-driven home décor brand. This segment also provides Saatchi Art, an online art gallery featuring a selection of original paintings, drawings, sculpture, and photography that provides a global community of artists an environment to exhibit and sell their work directly to consumers. The Media segment offers Livestrong.com, a healthy living destination with a library of health, fitness, lifestyle, and nutrition articles and videos; Hunker, an online destination for home and space inspiration, original home tours, practical do-it-yourself solutions, and design advice for people; Cuteness.com, a community for pet owners and animal lovers; and eHow, an online resource providing inspiration and solutions for do-it-yourself projects and crafts. This segment also provides content creation services; traffic sources; mobile applications; and monetization solutions, as well as develops partner sites. Leaf Group Ltd. sells its products through wholesale channels to trade and hospitality clients, as well as through retail distribution partners. The company was formerly known as Demand Media, Inc. and changed its name to Leaf Group Ltd. in November 2016. Leaf Group Ltd. was founded in 2006 and is headquartered in Santa Monica, California.

Zynga Company Profile

Zynga Inc. develops, markets, and operates social games as live services in the United States and internationally. The company's games are played on mobile platforms, such as iOS and Android operating systems, as well as on social networking sites, including Facebook. It also provides advertising services comprising mobile and display ads, engagement ads and offers, and branded virtual goods and sponsorships to advertising agencies and brokers; and software licensing and maintenance services related to NaturalMotion technology, as well as licenses its own brands. The company was formerly known as Zynga Game Network Inc. and changed its name to Zynga Inc. in November 2010. Zynga Inc. was founded in 2007 and is headquartered in San Francisco, California.

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