System1 (NYSE:SST – Get Free Report) and Zillow Group (NASDAQ:Z – Get Free Report) are both communication services companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.
Profitability
This table compares System1 and Zillow Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| System1 | -50.66% | -439.90% | -19.35% |
| Zillow Group | 1.96% | 2.32% | 1.97% |
Insider and Institutional Ownership
87.5% of System1 shares are owned by institutional investors. Comparatively, 71.0% of Zillow Group shares are owned by institutional investors. 10.2% of System1 shares are owned by company insiders. Comparatively, 25.0% of Zillow Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares System1 and Zillow Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| System1 | $180.94 million | 0.10 | -$65.35 million | ($11.31) | -0.15 |
| Zillow Group | $2.58 billion | 2.70 | $23.00 million | $0.22 | 140.73 |
Zillow Group has higher revenue and earnings than System1. System1 is trading at a lower price-to-earnings ratio than Zillow Group, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
System1 has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500. Comparatively, Zillow Group has a beta of 2.04, suggesting that its share price is 104% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and price targets for System1 and Zillow Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| System1 | 1 | 1 | 1 | 0 | 2.00 |
| Zillow Group | 1 | 8 | 5 | 1 | 2.40 |
System1 presently has a consensus price target of $6.50, suggesting a potential upside of 284.16%. Zillow Group has a consensus price target of $57.71, suggesting a potential upside of 86.42%. Given System1’s higher probable upside, equities analysts plainly believe System1 is more favorable than Zillow Group.
Summary
Zillow Group beats System1 on 13 of the 15 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 Zillow Group
Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop and floor plans. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.
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