Comparing Zillow Group (NASDAQ:Z) and Sprout Social (NASDAQ:SPT)

Sprout Social (NASDAQ:SPT) and Zillow Group (NASDAQ:Z) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, risk, analyst recommendations, profitability, valuation and earnings.

Earnings & Valuation

This table compares Sprout Social and Zillow Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprout Social	$418.41 million	2.59	-$61.97 million	($1.04)	-17.91
Zillow Group	$2.24 billion	8.31	-$112.00 million	($0.34)	-226.32

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

Institutional & Insider Ownership

71.0% of Zillow Group shares are owned by institutional investors. 10.1% of Sprout Social shares are owned by insiders. Comparatively, 25.0% of Zillow Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Sprout Social and Zillow Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprout Social	-14.25%	-31.03%	-12.37%
Zillow Group	-3.51%	-1.62%	-1.25%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Sprout Social and Zillow Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprout Social	1	6	6	0	2.38
Zillow Group	0	8	4	3	2.67

Sprout Social presently has a consensus target price of $30.00, indicating a potential upside of 61.03%. Zillow Group has a consensus target price of $83.71, indicating a potential upside of 8.79%. Given Sprout Social’s higher possible upside, analysts plainly believe Sprout Social is more favorable than Zillow Group.

Risk and Volatility

Sprout Social has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Zillow Group has a beta of 2.11, suggesting that its share price is 111% more volatile than the S&P 500.

Summary

Zillow Group beats Sprout Social on 11 of the 15 factors compared between the two stocks.

About Sprout Social

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides cloud software for social messaging, data and workflows in a unified system of record, intelligence, and action. It offers integrated tools, such as social engagement/response; publishing; reporting and analytics; social listening and business intelligence; reputation management; social commerce; employee advocacy; and automation and workflows. In addition, the company provides smart inbox, social customer relationship management, social monitoring and alerts, customer service tools, and automation; and centralized content planning, creation, and publishing, automated scheduling, content performance reporting, suggested content, message approval workflows, publishing permissions and governance, and content and asset libraries. Further, it offers social media; content performance, customer service and team, custom report builder, and reporting API; and market research, brand health, competitive insights, consumer trends, and product feedback; and social commerce, reputation management, employee advocacy, mobile applications, and chat bot creation and management. Additionally, the company offers professional services consisting of consulting and training services. It serves social and community management; public relations; marketing; influencer marketing; customer service and care; commerce, sales and customer acquisition; recruiting and hiring, product development, and business strategy; and small-and-medium-sized businesses, mid-market companies, enterprises, marketing agencies, government, non-profit, and educational institutions. Sprout Social, Inc. was incorporated in 2010 and is headquartered in Chicago, Illinois.

About Zillow Group

Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop and floor plans. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.