Financial Contrast: iHeartMedia (NASDAQ:IHRT) versus Netflix (NASDAQ:NFLX)

iHeartMedia (NASDAQ:IHRT) and Netflix (NASDAQ:NFLX) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Institutional and Insider Ownership

93.9% of iHeartMedia shares are held by institutional investors. Comparatively, 80.9% of Netflix shares are held by institutional investors. 6.3% of iHeartMedia shares are held by company insiders. Comparatively, 1.4% of Netflix shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares iHeartMedia and Netflix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
iHeartMedia	-12.24%	-1.63%	-1.46%
Netflix	24.30%	43.26%	20.36%

Analyst Ratings

This is a summary of current ratings and price targets for iHeartMedia and Netflix, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
iHeartMedia	2	2	0	0	1.50
Netflix	0	12	36	2	2.80

iHeartMedia currently has a consensus price target of $4.25, suggesting a potential upside of 13.94%. Netflix has a consensus price target of $115.50, suggesting a potential upside of 11.96%. Given iHeartMedia’s higher probable upside, analysts plainly believe iHeartMedia is more favorable than Netflix.

Volatility and Risk

iHeartMedia has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, Netflix has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Valuation and Earnings

This table compares iHeartMedia and Netflix”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
iHeartMedia	$3.86 billion	0.15	-$472.87 million	($3.07)	-1.21
Netflix	$45.18 billion	9.64	$10.98 billion	$2.53	40.77

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

Summary

Netflix beats iHeartMedia on 12 of the 15 factors compared between the two stocks.

About iHeartMedia

iHeartMedia, Inc. operates as an audio media company in the United States and internationally. It operates through three segments: Multiplatform Group, Digital Audio Group, and Audio & Media Services Group. The Multiplatform Group segment offers broadcast radio stations, sponsorship and events, and live and virtual events; and operates Premiere Networks, a national radio network that produces, distributes, or represents syndicated radio programs and services to radio station affiliates. It also delivers real-time traffic flow and incident information, and weather updates, sports, and news. The Digital Audio Group segment provides podcasting, digital sites, newsletters, digital services, and programs; and iHeartRadio, a mobile app and web based service for radio stations, digital only stations, custom artist stations, and podcasts. The Audio and Media Services Group segment engages in the media representation business; and provides scheduling and broadcast software and services. This segment also provides RCS, a cloud and on-premises broadcast software, such as radio and television automation, music scheduling, newsroom automation, advertising sales management, disaster recovery solutions; and real-time audio recognition technology to radio and television stations, cable channels, record labels, advertisers, and agencies, as well as media streaming and research services. The company was formerly known as CC Media Holdings, Inc. and changed its name to iHeartMedia, Inc. in September 2014. The company is headquartered in San Antonio, Texas.

About Netflix

Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices. It has operations in approximately 190 countries. The company was incorporated in 1997 and is headquartered in Los Gatos, California.