Snap (NYSE:SNAP – Get Free Report) and Alphabet (NASDAQ:GOOGL – Get Free Report) are both communication services companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.
Analyst Ratings
This is a summary of recent ratings and price targets for Snap and Alphabet, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Snap | 2 | 23 | 11 | 1 | 2.30 |
| Alphabet | 0 | 5 | 45 | 5 | 3.00 |
Snap presently has a consensus target price of $7.31, suggesting a potential upside of 39.33%. Alphabet has a consensus target price of $412.51, suggesting a potential upside of 39.47%. Given Alphabet’s stronger consensus rating and higher possible upside, analysts clearly believe Alphabet is more favorable than Snap.
Earnings & Valuation
This table compares Snap and Alphabet”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Snap | $5.93 billion | 1.50 | -$460.49 million | ($0.09) | -58.28 |
| Alphabet | $471.10 billion | 7.72 | $132.17 billion | $19.16 | 15.44 |
Alphabet has higher revenue and earnings than Snap. Snap is trading at a lower price-to-earnings ratio than Alphabet, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Snap has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Alphabet has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.
Profitability
This table compares Snap and Alphabet’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Snap | -2.30% | -7.10% | -2.00% |
| Alphabet | 50.03% | 43.33% | 29.24% |
Insider and Institutional Ownership
47.5% of Snap shares are held by institutional investors. Comparatively, 40.0% of Alphabet shares are held by institutional investors. 22.7% of Snap shares are held by company insiders. Comparatively, 11.6% of Alphabet shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Alphabet beats Snap on 12 of the 14 factors compared between the two stocks.
About Snap
Snap Inc. is a technology company best known for Snapchat, a mobile application for visual communication. The company’s products and services help people share photos and videos, message friends, and explore content from creators and publishers. Snapchat features include Stories, Spotlight for short-form video, Snap Map, and augmented reality tools such as interactive Lenses. Snap also provides advertising solutions to businesses and develops camera-related products and services, including its Spectacles smart glasses and Snap AR platform.
About Alphabet
Alphabet Inc. is a technology holding company whose largest business is Google. Founded in 1998 by Larry Page and Sergey Brin, Google became part of Alphabet when the company reorganized its businesses under the holding-company structure in 2015. Google’s products and services include Search, YouTube, Android, Chrome, Google Maps, Google Play and Google Cloud. The company also generates revenue from digital advertising and offers devices, subscriptions and artificial intelligence products and services.
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