Snap Inc. (NYSE:SNAP) and GoDaddy Inc. (NYSE:GDDY) are both Technology companies that recently hit new highs. This price action has ruffled more than a few feathers in the investment community, but is one a better investment than the other? To answer this, we will compare the two companies across growth, profitability, risk, return, dividends, and valuation measures.
Snap Inc. (NYSE:SNAP) operates in the Internet Software & Services segment of the Technology sector. In terms of efficiency, SNAP has an asset turnover ratio of 0.19. This figure represents the amount of revenue a company generates per dollar of assets. SNAP’s financial leverage ratio is 0.12, which indicates that the company’s asset base is primarily funded by equity capital. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is -109.10%, which is worse than the Internet Software & Services industry average ROE.
Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is -1.23. The average investment recommendation for SNAP, taken from a group of Wall Street Analysts, is 3.10, or a hold.
Over the past three months, Snap Inc. insiders have been net sellers, acquiring a net of 679,505 shares. This implies that insiders have been feeling relatively bullish about the outlook for SNAP. GoDaddy Inc. (NYSE:GDDY) operates in the Internet Software & Services segment of the Technology sector. GDDY has increased sales at a 15.60% CAGR over the past five years, and is considered a high growth stock. The company has a net profit margin of 2.00% and is more profitable than the average Internet Software & Services player. GDDY’s asset turnover ratio is 0.47 and the company has financial leverage of 11.3. GDDY’s return on equity of 8.60% is worse than the Internet Software & Services industry average.
Stock has a payout ratio of 0.00%. According to this ratio, GDDY should be able to continue making payouts at these levels. The company trades at a free cash flow yield of 2.08 and has a P/E of 360.08. Compared to the average company in the 53.96 space, GDDY is relatively expensive. The average analyst recommendation for GDDY is 2.10, or a buy.
GoDaddy Inc. insiders have sold a net of -12,410,961 shares during the past three months, which implies that the company’s top executives have been feeling bearish about the stock’s outlook.
Snap Inc. (NYSE:GDDY) scores higher than GoDaddy Inc. (NYSE:SNAP) on 6 of the 13 measures compared between the two companies. GDDY has the better fundamentals, scoring higher on growth, profitability, efficiency and return metrics.