Comparing Marchex (NASDAQ:MCHX) and Upwork (NASDAQ:UPWK)

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

Volatility and Risk

Upwork has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Marchex has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500.

Valuation and Earnings

This table compares Upwork and Marchex”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upwork	$787.78 million	2.02	$115.43 million	$0.84	14.54
Marchex	$46.49 million	1.36	-$4.95 million	($0.11)	-13.00

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upwork	0	6	7	0	2.54
Marchex	1	1	0	0	1.50

Upwork currently has a consensus target price of $22.60, indicating a potential upside of 85.09%. Given Upwork’s stronger consensus rating and higher possible upside, equities analysts plainly believe Upwork is more favorable than Marchex.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Upwork	14.65%	18.76%	9.03%
Marchex	-10.38%	-13.57%	-10.40%

Insider & Institutional Ownership

77.7% of Upwork shares are owned by institutional investors. Comparatively, 73.5% of Marchex shares are owned by institutional investors. 7.5% of Upwork shares are owned by company insiders. Comparatively, 23.5% of Marchex shares are owned 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

Upwork beats Marchex on 12 of the 14 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 Marchex

Marchex, Inc., a conversation intelligence company, provides conversational analytics and related solutions in the United States, Canada, and internationally. Its products include Marketing Edge that identifies which campaigns and channels are driving inbound conversations, evaluates what happens during those conversations, and closes the sales loop by connecting converted sales to marketing driven leads; Sonar Business Text Messaging, an artificial intelligence (AI) empowered intelligent workflow enabled mobile messaging solution that enables operations, sales, and marketing teams to communicate personally with field staff, prospects, and customers; Marchex Platform Services, a robust API-based conversation intelligence product that allows executives, sales, customer engagement, and marketing teams to apply Marchex AI to most any calls, regardless of communication platform, in order to identify actionable insights from conversations with their customers; Spotlight, an AI conversation analytics product for multi-location businesses; and Engage, a solution that provides locations with applications to enhance their overall performance. The company was incorporated in 2003 and is headquartered in Seattle, Washington.