Optimum Communications (NYSE:OPTU) versus Advantage Solutions (NASDAQ:ADV) Critical Analysis

Advantage Solutions (NASDAQ:ADV) and Optimum Communications (NYSE:OPTU) are both small-cap communication services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.

Earnings and Valuation

This table compares Advantage Solutions and Optimum Communications”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advantage Solutions	$3.54 billion	0.10	-$227.74 million	($21.34)	-1.25
Optimum Communications	$8.59 billion	0.03	-$1.87 billion	($10.39)	-0.09

Advantage Solutions has higher earnings, but lower revenue than Optimum Communications. Advantage Solutions is trading at a lower price-to-earnings ratio than Optimum Communications, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

49.8% of Advantage Solutions shares are held by institutional investors. Comparatively, 54.8% of Optimum Communications shares are held by institutional investors. 9.7% of Advantage Solutions shares are held by company insiders. Comparatively, 43.4% of Optimum Communications shares are held 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.

Profitability

This table compares Advantage Solutions and Optimum Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advantage Solutions	-7.65%	-48.15%	-9.47%
Optimum Communications	-58.15%	N/A	-0.70%

Analyst Recommendations

This is a breakdown of current recommendations for Advantage Solutions and Optimum Communications, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advantage Solutions	2	1	1	0	1.75
Optimum Communications	4	5	0	0	1.56

Advantage Solutions presently has a consensus price target of $42.00, suggesting a potential upside of 58.08%. Optimum Communications has a consensus price target of $0.92, suggesting a potential downside of 3.35%. Given Advantage Solutions’ stronger consensus rating and higher probable upside, analysts plainly believe Advantage Solutions is more favorable than Optimum Communications.

Volatility and Risk

Advantage Solutions has a beta of 2.16, indicating that its stock price is 116% more volatile than the S&P 500. Comparatively, Optimum Communications has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.

About Advantage Solutions

Advantage Solutions Inc. provides business solutions to consumer goods manufacturers and retailers in North America and internationally. It operates in two segments, Sales and Marketing. The Sales segment offers brand-centric services, such as headquarter relationship management; analytics, insights, and intelligence; and brand-centric merchandising services. This segment also provides retailer-centric services comprising retailer-centric merchandising and in-store media services. The Marketing segment offers brand-centric services, including shopper and consumer marketing, and brand experiential services; retailer-centric services, such as retail experiential and private label services; and digital marketing, and digital media and advertising services. The company was formerly known as Karman Holding Corp. and changed its name to Advantage Solutions Inc. in March 2016. The company was founded in 1987 and is headquartered in Irvine, California.

About Optimum Communications

Altice USA, Inc., together with its subsidiaries, provides broadband communications and video services in the United States, Canada, Puerto Rico, and the Virgin Islands. It offers broadband, video, telephony, and mobile services to approximately five million residential and business customers. The company’s video services include delivery of broadcast stations and cable networks; over the top services; video-on-demand, high-definition channels, digital video recorder, and pay-per-view services; and platforms for video programming through mobile applications. It also provides voice over Internet protocol telephone services; and mobile services, such as data, talk, and text. In addition, the company offers Ethernet, data transport, IP-based virtual private networks, Internet access, and telephony services; hosted telephony services, managed Wi-Fi, managed desktop and server backup, and collaboration services comprising audio and web conferencing; fiber-to-the-tower services to wireless carriers; data services consisting of wide area networking and dedicated data access, as well as wireless mesh networks; and enterprise class telephone services that include traditional multi-line phone service. Further, it provides business e-mail, hosted private branch exchange, web space storage, and network security monitoring; and international calling and toll free numbers. Additionally, the company offers audience-based and IP-authenticated cross-screen advertising solutions; and television and digital advertising services, as well as operates news channels under the News 12 Networks, Cheddar, and i24NEWS names. It also provides broadband communications and video services under the Optimum and Suddenlink brands. The company was incorporated in 2015 and is headquartered in Long Island City, New York. Altice USA, Inc. is a subsidiary of Next Alt. S.a.r.l.