Critical Review: NerdWallet (NASDAQ:NRDS) & Shutterstock (NYSE:SSTK)

Shutterstock (NYSE:SSTK) and NerdWallet (NASDAQ:NRDS) are both small-cap communication services companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Institutional & Insider Ownership

82.8% of Shutterstock shares are held by institutional investors. Comparatively, 38.8% of NerdWallet shares are held by institutional investors. 32.3% of Shutterstock shares are held by insiders. Comparatively, 52.7% of NerdWallet shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Shutterstock and NerdWallet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shutterstock	1	1	1	0	2.00
NerdWallet	1	3	4	0	2.38

Shutterstock currently has a consensus target price of $7.00, indicating a potential upside of 118.41%. NerdWallet has a consensus target price of $12.83, indicating a potential upside of 12.57%. Given Shutterstock’s higher probable upside, analysts clearly believe Shutterstock is more favorable than NerdWallet.

Profitability

This table compares Shutterstock and NerdWallet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shutterstock	-22.87%	13.61%	5.49%
NerdWallet	7.56%	18.07%	14.41%

Volatility & Risk

Shutterstock has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, NerdWallet has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500.

Earnings & Valuation

This table compares Shutterstock and NerdWallet”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shutterstock	$989.92 million	0.12	$45.50 million	($5.65)	-0.57
NerdWallet	$836.60 million	0.87	$48.70 million	$0.89	12.81

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

Summary

NerdWallet beats Shutterstock on 11 of the 14 factors compared between the two stocks.

About Shutterstock

Shutterstock, Inc. provides platform to connect brands and businesses to high quality content in North America, Europe, and internationally. The company offers image services consisting of photographs, vectors, and illustrations, which is used in visual communications, such as websites, digital and print marketing materials, corporate communications, books, publications, and others; footage services, including video clips, filmed by industry experts and cinema grade video effects in HD and 4K formats that are integrated into websites, social media, marketing campaigns, and cinematic productions; and music services comprising music tracks and sound effects, which are used to complement images and footage. It also provides 3 dimensional models consisting of 3D models used in various industries, such as advertising, media and video production, gaming, retail, education, design, and architecture; and generative AI content comprising images generated from algorithms trained with ethically sourced content. The company offers its services under the Shutterstock, Pond5, TurboSquid, PicMonkey, PremiumBeat, Splash News, Bigstock, and Offset brand names. In addition, it operates a collection of graphics interchange format visuals and stickers that supplies casual conversational content. The company serves corporate professionals and organizations, media and broadcast companies, and small and medium-sized businesses, and individual creators through digital, live sales, and client management channels. Shutterstock, Inc. was founded in 2003 and is headquartered in New York, New York.

About NerdWallet

NerdWallet, Inc. operates a digital platform that provides consumer-driven advice about personal finance by connecting individuals and small and mid-sized businesses with financial products providers in the United States, the United Kingdom, Australia, and Canada. Its platform offers guidance to consumers through educational content, tools and calculators, and product marketplaces, as well as through NerdWallet app for various financial products, including credit cards, mortgages, insurance, SMB products, personal loans, banking, investing, and student loans. The company was founded in 2009 and is based in San Francisco, California.