Analyzing Stratus Properties (NASDAQ:STRS) & Fathom (NASDAQ:FTHM)

Fathom (NASDAQ:FTHM) and Stratus Properties (NASDAQ:STRS) are both small-cap real estate companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Fathom and Stratus Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fathom	1	0	0	1	2.50
Stratus Properties	1	0	0	0	1.00

Fathom currently has a consensus price target of $2.50, indicating a potential upside of 1,076.47%. Given Fathom’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Fathom is more favorable than Stratus Properties.

Valuation and Earnings

This table compares Fathom and Stratus Properties”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fathom	$420.48 million	0.02	-$20.31 million	($0.80)	-0.27
Stratus Properties	$28.66 million	5.01	$11.98 million	$2.64	6.80

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

Institutional and Insider Ownership

55.5% of Fathom shares are owned by institutional investors. Comparatively, 61.6% of Stratus Properties shares are owned by institutional investors. 16.4% of Fathom shares are owned by insiders. Comparatively, 10.0% of Stratus Properties shares are owned 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.

Risk and Volatility

Fathom has a beta of 2.25, meaning that its share price is 125% more volatile than the S&P 500. Comparatively, Stratus Properties has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.

Profitability

This table compares Fathom and Stratus Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fathom	-6.27%	-75.89%	-33.25%
Stratus Properties	74.96%	6.28%	3.83%

Summary

Stratus Properties beats Fathom on 8 of the 14 factors compared between the two stocks.

About Fathom

Fathom Holdings Inc. provides a real estate services platform that integrates residential brokerage, mortgage, title, and insurance services in the United States. It operates through three segments: Real Estate Brokerage, Mortgage, and Technology. The Real Estate Brokerage segment provides real estate brokerage services. The Mortgage segment offers residential loan origination and underwriting services. The Technology segment provides Software as a Service solutions and data mining for third party customers. It offers access to various properties for sale or lease through its FathomRealty.com website to buyers, sellers, landlords, and tenants; insurance agency services; and title services. In addition, the company provides intelliAgent, a real estate technology platform that offers a suite of brokerage and agent level tools, technology, business processes, business intelligence and reporting, and training; transaction, personnel, customer relationship, and accounting management for agent transactions; and reporting, social media marketing, and other marketing and marketing repository services, as well as marketplace for add-on services and third-party technology. Its brands include Fathom Realty, Dagley Insurance, Encompass Lending, intelliAgent, LiveBy, Real Results, Verus Title, and Cornerstone. The company was founded in 2010 and is headquartered in Cary, North Carolina.

About Stratus Properties

Stratus Properties Inc., a real estate company, engages in the entitlement, development, management, leasing, and sale of multi and single family residential and commercial real estate properties in the Austin, Texas area and other select markets in Texas. The company operates in two segments, Real Estate Operations and Leasing Operations. Its leasing operations cover lease of space at retail and mixed-use and multi-family properties. The company was incorporated in 1992 and is headquartered in Austin, Texas.