Yelp (NYSE:YELP) versus Autohome (NYSE:ATHM) Financial Contrast

Yelp (NYSE:YELP) and Autohome (NYSE:ATHM) are both communication services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Yelp and Autohome, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yelp	3	3	1	0	1.71
Autohome	1	5	0	0	1.83

Yelp presently has a consensus price target of $26.57, suggesting a potential upside of 45.37%. Autohome has a consensus price target of $17.77, suggesting a potential downside of 13.60%. Given Yelp’s higher possible upside, research analysts plainly believe Yelp is more favorable than Autohome.

Valuation & Earnings

This table compares Yelp and Autohome”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yelp	$1.46 billion	0.68	$145.60 million	$2.09	8.75
Autohome	$5.49 billion	0.43	$225.19 million	$1.16	17.73

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

Institutional & Insider Ownership

90.1% of Yelp shares are held by institutional investors. Comparatively, 63.1% of Autohome shares are held by institutional investors. 8.3% of Yelp shares are held by insiders. Comparatively, 5.7% of Autohome shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Yelp has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, Autohome has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500.

Profitability

This table compares Yelp and Autohome’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yelp	8.59%	19.52%	13.44%
Autohome	17.05%	4.44%	3.53%

Summary

Yelp beats Autohome on 9 of the 14 factors compared between the two stocks.

About Yelp

Yelp Inc. operates a platform that connects consumers with local businesses in the United States and internationally. The company's platform covers various categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services. It provides free and paid advertising products to businesses, which include cost-per-click advertising and multi-location Ad products, as well as enables businesses to deliver targeted advertising to large and high-intent audience; and business listing page products. The company also offers other services comprising Yelp Guest Manager, a subscription-based suite of front-of-house management tools for restaurants, nightlife and certain other venues, which include online reservations, a waitlist management solution that allows consumers to check wait times and join waitlists remotely, as well as through hostless kiosks, and seating and server rotation management tools; Yelp Knowledge program that offers business owners local analytics and insights through access to its historical data and other proprietary content; and Yelp Fusion, which offers free access to various basic information through publicly available APIs, and paid access to content and data for consumer-facing enterprise use. In addition, it provides content licensing, as well as allows third-party data providers to update and manage business listing information on behalf of businesses. Further, the company offers its products directly through its sales force; indirectly through partners; and online through its website and business app, as well as non-advertising partner arrangements. It has partnership with Grubhub for providing consumers with a service to place food orders for pickup and delivery. The company was incorporated in 2004 and is based in San Francisco, California.

About Autohome

Autohome Inc. operates as an online destination for automobile consumers in the People’s Republic of China. The company delivers interactive content and tools to automobile consumers through its three websites, autohome.com.cn, che168.com, and ttpai.cn on PCs, mobile devices, mobile applications, and mini apps. It provides media services, including automaker advertising services and regional marketing campaigns; and leads generation services comprising dealer subscription services, advertising services for individual dealers, and used automobile listing and other platform-based services. The company offers Autohome Mall, an online transaction platform; and online bidding platform for used automobiles, as well as collects commissions for facilitating transactions of auto-financing and insurance products on its platform. The company was formerly known as Sequel Limited and changed its name to Autohome Inc. in October 2011. Autohome Inc. was incorporated in 2008 and is headquartered in Beijing, the People’s Republic of China.