Critical Contrast: PubMatic (NASDAQ:PUBM) vs. Similarweb (NYSE:SMWB)

Similarweb (NYSE:SMWB) and PubMatic (NASDAQ:PUBM) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Analyst Ratings

This is a breakdown of current ratings and target prices for Similarweb and PubMatic, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Similarweb	0	0	8	1	3.11
PubMatic	0	3	4	0	2.57

Similarweb currently has a consensus target price of $11.71, indicating a potential upside of 33.42%. PubMatic has a consensus target price of $21.00, indicating a potential upside of 41.99%. Given PubMatic’s higher probable upside, analysts clearly believe PubMatic is more favorable than Similarweb.

Institutional and Insider Ownership

57.6% of Similarweb shares are owned by institutional investors. Comparatively, 64.3% of PubMatic shares are owned by institutional investors. 2.9% of PubMatic 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.

Volatility and Risk

Similarweb has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, PubMatic has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Earnings & Valuation

This table compares Similarweb and PubMatic”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Similarweb	$218.02 million	3.26	-$29.37 million	($0.14)	-62.71
PubMatic	$282.25 million	2.62	$8.88 million	$0.21	70.43

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

Profitability

This table compares Similarweb and PubMatic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Similarweb	-5.07%	-60.53%	-4.73%
PubMatic	7.08%	6.92%	3.07%

Summary

PubMatic beats Similarweb on 10 of the 14 factors compared between the two stocks.

About Similarweb

Similarweb Ltd. provides cloud-based digital intelligence solutions in the United States, Europe, the Asia Pacific, the United Kingdom, Israel, and internationally. The company offers digital research intelligence solutions for its customers to benchmark performance against competitors and market leaders, analyze trends in the market, conduct deeper research into specific companies, and analyze audience behavior; and digital marketing intelligence solutions for its customers to understand their competitors' online acquisition strategies in each marketing channel, and optimize their own strategies. It also provides sales intelligence solutions for its customers to access relevant buying signals and digital insights of their customers to generate leads quickly; and shopper intelligence solutions for its customers to analyze a view of their customers' digital journeys, monitor consumer demand, increase brand visibility in the search process, and optimize category and product level conversion in the purchase process. In addition, the company offers investor intelligence solutions for its customers to access an end-to-end view of market, sector, and company performance to ideate and monitor investment opportunities; forecast market performance; and perform due diligence. Further, it provides data-as-a-service and advisory services. The company serves retail, consumer packaged goods, consumer finance, consultancies, marketing and advertising agencies, media and publishers, business-to-business software, payment processors, travel, and institutional investors. Similarweb Ltd. was incorporated in 2009 and is headquartered in Givatayim, Israel.

About PubMatic

PubMatic, Inc., a technology company, engages in the provision of a cloud infrastructure platform that enables real-time programmatic advertising transactions for digital content creators, advertisers, agencies, agency trading desks, and demand side platforms worldwide. Its PubMatic SSP, a sell-side platform, used for the purchase and sale of digital advertising inventory for publishers and buyers. The company also provides solutions, including OpenWrap, a header bidding solution; Openwrap OTT, a prebid-powered unified bidding solution; Openwrap SDK, an enterprise-grade management tools and analytics; Connect, a solution that provides additional data and insights to publishers and buyers; Activate, which allows buyers to execute direct deals on its platform across publisher inventory; Convert, a commerce media solution; and Identity Hub, an ID management tool for publishers that leverages specialized technology?infrastructure?to simplify the complex alternative identifier marketplace. Its platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. The company was incorporated in 2006 and is based in Redwood City, California.