Townsquare Media (NYSE:TSQ – Get Free Report) and PubMatic (NASDAQ:PUBM – Get Free Report) are both small-cap communication services companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.
Profitability
This table compares Townsquare Media and PubMatic’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Townsquare Media | -11.82% | -5.59% | 0.51% |
| PubMatic | -4.66% | -5.41% | -1.99% |
Valuation and Earnings
This table compares Townsquare Media and PubMatic”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Townsquare Media | $425.39 million | 0.18 | -$9.75 million | ($2.88) | -1.42 |
| PubMatic | $282.93 million | 2.84 | -$14.46 million | ($0.30) | -58.80 |
Townsquare Media has higher revenue and earnings than PubMatic. PubMatic is trading at a lower price-to-earnings ratio than Townsquare Media, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
71.7% of Townsquare Media shares are held by institutional investors. Comparatively, 64.3% of PubMatic shares are held by institutional investors. 30.3% of Townsquare Media shares are held by insiders. Comparatively, 27.8% of PubMatic shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and target prices for Townsquare Media and PubMatic, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Townsquare Media | 1 | 1 | 1 | 0 | 2.00 |
| PubMatic | 1 | 1 | 11 | 0 | 2.77 |
Townsquare Media currently has a consensus target price of $10.00, suggesting a potential upside of 143.96%. PubMatic has a consensus target price of $19.73, suggesting a potential upside of 11.83%. Given Townsquare Media’s higher possible upside, research analysts clearly believe Townsquare Media is more favorable than PubMatic.
Risk and Volatility
Townsquare Media has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, PubMatic has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500.
About Townsquare Media
Townsquare Media, Inc. operates as a digital media and marketing solutions company in small and medium-sized businesses. It operates through three segments: Subscription Digital Marketing Solutions, Digital Advertising, and Broadcast Advertising. The Subscription Digital Marketing Solutions segment offers website design, creation, and development, as well as hosting services; and search engine optimization, online directory optimization, e-commerce solutions, online reputation monitoring, social media management, appointment scheduling, payment and invoice, customer management, and email and SMS marketing services. The Digital Advertising segment provides digital advertising on its owned and operated, digital programmatic advertising, and data analytics and management platform. The Broadcast Advertising segment engages in the sale of advertising on local radio stations to local, regional, and national spot advertisers, as well as national network advertisers. It also owns and operates live events, including concerts, expositions, and other experiential events; and operates local media under the WYRK.com, WJON.com, and NJ101.5.com brands, as well as national music under the XXLmag.com, TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com brands. The company was formerly known as Regent Communications, Inc. and changed its name to Townsquare Media, Inc. in May 2010. Townsquare Media, Inc. is headquartered in Purchase, New York.
About PubMatic
PubMatic, Inc., a technology company, engages in the provision of a cloud infrastructure platform that enables real-time programmatic advertising transactions for digital content creators, advertisers, agencies, agency trading desks, and demand side platforms worldwide. Its PubMatic SSP, a sell-side platform, used for the purchase and sale of digital advertising inventory for publishers and buyers. The company also provides solutions, including OpenWrap, a header bidding solution; Openwrap OTT, a prebid-powered unified bidding solution; Openwrap SDK, an enterprise-grade management tools and analytics; Connect, a solution that provides additional data and insights to publishers and buyers; Activate, which allows buyers to execute direct deals on its platform across publisher inventory; Convert, a commerce media solution; and Identity Hub, an ID management tool for publishers that leverages specialized technology?infrastructure?to simplify the complex alternative identifier marketplace. Its platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. The company was incorporated in 2006 and is based in Redwood City, California.
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