Upwork (NASDAQ:UPWK) & Alphabet (NASDAQ:GOOGL) Critical Analysis

Upwork (NASDAQ:UPWK) and Alphabet (NASDAQ:GOOGL) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Profitability

This table compares Upwork and Alphabet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Upwork	31.63%	41.05%	19.66%
Alphabet	32.23%	35.00%	25.30%

Volatility & Risk

Upwork has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Alphabet has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Upwork and Alphabet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upwork	0	4	10	0	2.71
Alphabet	0	6	41	4	2.96

Upwork presently has a consensus price target of $22.92, suggesting a potential upside of 9.23%. Alphabet has a consensus price target of $312.65, suggesting a potential downside of 1.40%. Given Upwork’s higher possible upside, equities research analysts clearly believe Upwork is more favorable than Alphabet.

Earnings & Valuation

This table compares Upwork and Alphabet”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upwork	$780.86 million	3.51	$215.59 million	$1.75	11.99
Alphabet	$350.02 billion	10.93	$100.12 billion	$10.14	31.27

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

Institutional & Insider Ownership

77.7% of Upwork shares are held by institutional investors. Comparatively, 40.0% of Alphabet shares are held by institutional investors. 7.6% of Upwork shares are held by company insiders. Comparatively, 11.6% of Alphabet shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Alphabet beats Upwork on 12 of the 15 factors compared between the two stocks.

About Upwork

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally. The company’s work marketplace provides access to talent with various skills across a range of categories, including administrative support, sales and marketing, design and creative, and customer service, as well as web, mobile, and software development. Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. The company’s work marketplace offers access to various functionalities for remote engagements with talent, including communication and collaboration, ability to receive talent invoices through their work marketplace, and payment protection. Its marketplace offerings include Upwork Payroll and Upwork Enterprise, as well as managed and escrow services. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in San Francisco, California.

About Alphabet

Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.