Head to Head Contrast: Yelp (YELP) and 58.com (WUBA)

Yelp (NYSE: YELP) and 58.com (NYSE:WUBA) are both mid-cap technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for Yelp and 58.com, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yelp 1 15 19 0 2.51
58.com 2 3 5 0 2.30

Yelp currently has a consensus target price of $43.88, indicating a potential downside of 3.32%. 58.com has a consensus target price of $50.63, indicating a potential downside of 38.25%. Given Yelp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Yelp is more favorable than 58.com.

Risk & Volatility

Yelp has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, 58.com has a beta of 2.15, suggesting that its share price is 115% more volatile than the S&P 500.

Insider and Institutional Ownership

85.7% of Yelp shares are held by institutional investors. Comparatively, 60.6% of 58.com shares are held by institutional investors. 10.1% of Yelp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Yelp and 58.com’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Yelp $713.07 million 5.28 -$4.67 million $0.23 197.35
58.com $1.14 billion 10.52 -$110.71 million $0.77 106.47

Yelp has higher earnings, but lower revenue than 58.com. 58.com is trading at a lower price-to-earnings ratio than Yelp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Yelp and 58.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yelp 2.31% 2.20% 2.00%
58.com 7.93% 4.08% 2.80%

About Yelp

Yelp Inc. (Yelp) connects people with local businesses by bringing ‘word of mouth’ online and providing a platform for businesses and consumers to engage and transact. The Company offers local business review sites. Yelp provides a platform for consumers to share their everyday local business experiences with other consumers by posting reviews, tips, photos and videos, and to engage directly with businesses, through reviews, its Request-A-Quote and Message the Business features, and by completing transactions on the Yelp Platform. Yelp also provides businesses of all sizes with a range of free and paid services that help them engage with consumers. The Yelp Platform allows consumers to transact with local businesses directly on Yelp through Yelp Reservations, its online reservations product, and integrations with partners ranging from Shoptiques.com (boutique shopping) to GolfNow (tee time booking) to BloomNation (flower ordering).

About 58.com

58.com Inc. is a holding company. The Company’s business consists of its online classifieds and listing platforms. Its online classifieds and listings platforms enable local merchants and consumers to connect, share information and conduct business in China. These platforms include 58, Ganji and Anjuke. 58 and Ganji are online multi-content category-classified advertising platforms, while Anjuke is an online real estate listing platform. In addition, 58 Daojia Inc., its subsidiary, operates a mobile-based closed-loop transactional platform for home services, which directly connects consumers and individual service providers for local services, such as home cleaning, moving services and manicure services provided at home. Its classifieds and listing platforms contain local information for over 480 cities across various content categories, including jobs, real estate, used goods, automotive and yellow pages. It also offers membership, online marketing services and e-commerce services.

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