Fluent (NASDAQ:FLNT) & Stagwell (NASDAQ:STGW) Critical Analysis

Fluent (NASDAQ:FLNT) and Stagwell (NASDAQ:STGW) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Institutional and Insider Ownership

23.3% of Fluent shares are held by institutional investors. Comparatively, 35.6% of Stagwell shares are held by institutional investors. 23.3% of Fluent shares are held by company insiders. Comparatively, 3.8% of Stagwell shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Fluent and Stagwell’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fluent	-12.47%	-109.15%	-29.76%
Stagwell	0.68%	15.31%	2.88%

Analyst Ratings

This is a summary of recent ratings for Fluent and Stagwell, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fluent	0	1	0	0	2.00
Stagwell	1	3	4	0	2.38

Fluent currently has a consensus target price of $2.50, suggesting a potential downside of 29.38%. Stagwell has a consensus target price of $7.96, suggesting a potential upside of 51.88%. Given Stagwell’s stronger consensus rating and higher possible upside, analysts clearly believe Stagwell is more favorable than Fluent.

Volatility and Risk

Fluent has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Stagwell has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500.

Valuation and Earnings

This table compares Fluent and Stagwell”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fluent	$254.62 million	0.41	-$29.28 million	($1.15)	-3.08
Stagwell	$2.84 billion	0.46	$2.26 million	$0.06	87.33

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

Summary

Stagwell beats Fluent on 13 of the 14 factors compared between the two stocks.

About Fluent

Fluent, Inc. provides data-driven digital marketing services in the United States and internationally. The company operates through Fluent and All Other segments. It offers customer acquisition services by operating digital marketing campaigns, through which the company connects its advertiser clients with consumers. The company also delivers data and performance-based marketing executions to various consumer brands, direct marketers, and agencies across a range of industries, including financial products and services, media and entertainment, health and life sciences, retail and consumer, and staffing and recruitment. Fluent, Inc. was founded in 2010 and is headquartered in New York, New York.

About Stagwell

Stagwell Inc. provides digital transformation, performance media and data, consumer insights and strategy, and creativity and communications services. The company operates through three segments: Integrated Agencies Network, Brand Performance Network, and Communications Network. It designs and builds digital platforms and experiences that support the delivery of content, commerce, service, and sales; creates websites, mobile applications, back-end systems, content and data management systems, and other digital environments; designs and implements technology and data strategies; and develops software and related technology products, including artificial intelligence (AI)-enabled communications, research, and media technology, cookie-less data platforms for advance targeting and activation, software tools for e-commerce applications, specialty media solutions in the augmented reality space, and text messaging applications for consumer engagement. The company also provides audience analysis, and media buying and planning services; and strategic insights and guidance services that offers business content, product, communications, and media strategies. In addition, it offers strategy development, advertising creation, live events, immersive digital experiences, cross platform engagement, and social media content services; and leadership, investor and financial relations, social media, executive positioning and visibility, strategic communication, public relation, and public affair services. Further, the company provides Stagwell Marketing Cloud, a suite of software-as-a-service (SaaS) and data-as-a-service (DaaS) technology solutions, including research and insights, communications technology, advance media platform, and media studios; and technology-driven solutions for in-house marketers. Stagwell Inc. is headquartered in New York, New York.