Financial Analysis: Rightside Group (NAME) and Shutterstock (SSTK)

Rightside Group (NASDAQ: NAME) and Shutterstock (NYSE:SSTK) are both small-cap technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Rightside Group and Shutterstock, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rightside Group 0 1 0 0 2.00
Shutterstock 1 4 0 0 1.80

Rightside Group currently has a consensus target price of $10.60, suggesting a potential downside of 0.09%. Shutterstock has a consensus target price of $38.60, suggesting a potential downside of 12.23%. Given Rightside Group’s stronger consensus rating and higher probable upside, research analysts plainly believe Rightside Group is more favorable than Shutterstock.

Insider & Institutional Ownership

68.4% of Rightside Group shares are owned by institutional investors. Comparatively, 59.8% of Shutterstock shares are owned by institutional investors. 2.4% of Rightside Group shares are owned by insiders. Comparatively, 47.3% of Shutterstock shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Rightside Group -39.04% -15.14% -8.53%
Shutterstock 4.58% 9.71% 5.50%

Earnings and Valuation

This table compares Rightside Group and Shutterstock’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rightside Group N/A N/A N/A ($2.09) -5.08
Shutterstock $494.32 million 3.08 $32.62 million $0.69 63.74

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

Summary

Shutterstock beats Rightside Group on 7 of the 10 factors compared between the two stocks.

About Rightside Group

Rightside Group, Ltd. is a provider of domain name services that enable businesses and consumers to find, establish and maintain their digital address. The Company is a registrar, offering domain name registration and other related services to resellers and domain name registrants. It provides infrastructure services through its eNom brand. It has over 16.5 million domain names under management. It has a portfolio of over 40 generic Top Level Domains (gTLDs) acquired through Internet Corporation for Assigned Names and Numbers (ICANN)’s expansion of new gTLDs. It has launched all of its gTLDs, including .NEWS, .LIVE, and .FAMILY, into general availability in the marketplace. Its registry services business builds a distribution network of over 125 ICANN accredited registrars, including GoDaddy, eNom and Name.com, as well as other complementary distribution partners, such as Website builders and e-mail service providers, that offer its gTLD domain names to businesses and consumers.

About Shutterstock

Shutterstock, Inc. (Shutterstock) is a global technology company that operates a two-sided marketplace for professionals to license content. The Company’s library of content includes digital imagery, which consists of licensed photographs, vectors, illustrations and video clips that customers use in their visual communications, such as Websites, digital and print marketing materials, corporate communications, books, publications and video content, and commercial music, which consists of music tracks and sound effects and which is often used to complement digital imagery. It also offers digital asset management services through its cloud-based digital asset management platform (webdam). Its global marketplace brings together users and contributors of content by providing a collection of content its customers can pay to license and incorporate into their work and by compensating contributors as their content is licensed to customers.

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