Head to Head Review: Wealthfront (WLTH) vs. The Competition

Wealthfront (NASDAQ:WLTH) is one of 1,746 publicly-traded companies in the “Capital Markets” industry, but how does it contrast to its peers? We will compare Wealthfront to similar companies based on the strength of its risk, institutional ownership, dividends, valuation, analyst recommendations, profitability and earnings.

Earnings & Valuation

This table compares Wealthfront and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Wealthfront	$371.71 million	-$42.07 million	-11.41
Wealthfront Competitors	$3.12 billion	$397.40 million	15.77

Wealthfront’s peers have higher revenue and earnings than Wealthfront. Wealthfront is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Wealthfront and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wealthfront	1	4	5	0	2.40
Wealthfront Competitors	5605	20212	22565	650	2.37

Wealthfront presently has a consensus price target of $12.36, suggesting a potential upside of 16.41%. As a group, “Capital Markets” companies have a potential upside of 23.14%. Given Wealthfront’s peers higher probable upside, analysts clearly believe Wealthfront has less favorable growth aspects than its peers.

Dividends

Wealthfront pays an annual dividend of $0.32 per share and has a dividend yield of 3.0%. Wealthfront pays out -34.4% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 29.2% of their earnings in the form of a dividend.

Profitability

This table compares Wealthfront and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wealthfront	-19.42%	-14.62%	-5.13%
Wealthfront Competitors	314.79%	9.90%	3.46%

Insider and Institutional Ownership

30.6% of shares of all “Capital Markets” companies are held by institutional investors. 27.4% of Wealthfront shares are held by insiders. Comparatively, 13.1% of shares of all “Capital Markets” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Wealthfront peers beat Wealthfront on 10 of the 14 factors compared.

About Wealthfront

Wealthfront is a U.S.-based digital financial services company that provides automated investing, cash management and financial planning tools. Its platform is designed to help individuals manage savings and investments through online accounts and software. Wealthfront’s offerings include diversified investment portfolios managed with automated strategies, cash accounts offered through partner banks, and tools for setting financial goals and tracking progress. The company has also offered services such as individual stock investing and portfolio lines of credit.