Bumble (NASDAQ:BMBL) vs. System1 (NYSE:SST) Critical Analysis

System1 (NYSE:SST) and Bumble (NASDAQ:BMBL) are both small-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Insider and Institutional Ownership

87.5% of System1 shares are owned by institutional investors. Comparatively, 94.9% of Bumble shares are owned by institutional investors. 28.3% of System1 shares are owned by insiders. Comparatively, 7.8% of Bumble shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

System1 has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Bumble has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for System1 and Bumble, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
System1	0	1	1	0	2.50
Bumble	0	5	12	0	2.71

System1 currently has a consensus price target of $3.50, suggesting a potential upside of 153.62%. Bumble has a consensus price target of $15.14, suggesting a potential upside of 65.05%. Given System1’s higher probable upside, analysts clearly believe System1 is more favorable than Bumble.

Profitability

This table compares System1 and Bumble’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
System1	-49.23%	-42.08%	-12.99%
Bumble	2.04%	0.92%	0.60%

Earnings and Valuation

This table compares System1 and Bumble’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
System1	$401.97 million	0.31	-$227.22 million	($2.27)	-0.61
Bumble	$1.05 billion	1.10	-$4.21 million	$0.17	53.94

Bumble has higher revenue and earnings than System1. System1 is trading at a lower price-to-earnings ratio than Bumble, indicating that it is currently the more affordable of the two stocks.

Summary

Bumble beats System1 on 12 of the 14 factors compared between the two stocks.

About System1

System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.

About Bumble

Bumble Inc. provides online dating and social networking platforms in North America, Europe, internationally. It owns and operates websites and applications that offers subscription and in-app purchases dating products. The company operates apps, including Bumble, a dating app built with women at the center, where women make the first move; Badoo, the web and mobile free-to-use dating app; Official app where users connect their profile with that of their partner enabling a shared, linked product experience; Bumble BFF and Bumble Bizz Modes that have a format similar to the date mode requiring users to set up profiles and matching users through yes and no votes, similar to the dating platform; and Bumble for Friends, a friendship app where people in all stages of life can meet people nearby and create meaningful platonic connections, as well as Fruitz app is centered around encouraging honesty and transparency by sharing dating intentions from the first touch point. Bumble Inc. was founded in 2006 in and is headquartered in Austin, Texas.