Reviewing Trade Desk (NASDAQ:TTD) & Sprout Social (NASDAQ:SPT)

Sprout Social (NASDAQ:SPT) and Trade Desk (NASDAQ:TTD) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Sprout Social and Trade Desk, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprout Social	1	6	6	0	2.38
Trade Desk	3	12	21	0	2.50

Sprout Social currently has a consensus price target of $27.36, indicating a potential upside of 119.08%. Trade Desk has a consensus price target of $84.94, indicating a potential upside of 64.77%. Given Sprout Social’s higher probable upside, research analysts clearly believe Sprout Social is more favorable than Trade Desk.

Insider & Institutional Ownership

67.8% of Trade Desk shares are owned by institutional investors. 10.1% of Sprout Social shares are owned by insiders. Comparatively, 10.0% of Trade Desk shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Sprout Social and Trade Desk”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprout Social	$405.91 million	1.81	-$61.97 million	($0.95)	-13.15
Trade Desk	$2.44 billion	10.31	$393.08 million	$0.83	62.11

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

Volatility and Risk

Sprout Social has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Trade Desk has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sprout Social	-12.70%	-25.95%	-10.67%
Trade Desk	15.57%	15.19%	7.17%

Summary

Trade Desk beats Sprout Social on 12 of the 14 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 Trade Desk

The Trade Desk, Inc. operates as a technology company in the United States and internationally. The company offers a self-service cloud-based platform that allows buyers to plan, manage, optimize, and measure data-driven digital advertising campaigns across various ad formats and channels, including video, display, audio, digital-out-of-home, native, and social on various devices, such as computers, mobile devices, televisions, and streaming devices. It provides data and other value-added services. The company serves advertising agencies, brands, and other service providers for advertisers. The Trade Desk, Inc. was incorporated in 2009 and is headquartered in Ventura, California.