Sprout Social (NASDAQ:SPT – Get Free Report) and ZKH Group (NYSE:ZKH – Get Free Report) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.
Volatility and Risk
Sprout Social has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, ZKH Group has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500.
Profitability
This table compares Sprout Social and ZKH Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sprout Social | -8.18% | -13.90% | -5.72% |
| ZKH Group | -0.90% | -2.80% | -1.30% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sprout Social | 2 | 4 | 4 | 0 | 2.20 |
| ZKH Group | 1 | 0 | 0 | 0 | 1.00 |
Sprout Social currently has a consensus target price of $11.88, indicating a potential upside of 64.02%. Given Sprout Social’s stronger consensus rating and higher possible upside, analysts clearly believe Sprout Social is more favorable than ZKH Group.
Valuation and Earnings
This table compares Sprout Social and ZKH Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sprout Social | $457.55 million | 0.95 | -$43.33 million | ($0.66) | -10.97 |
| ZKH Group | $1.29 billion | 0.29 | -$19.44 million | ($0.08) | -36.24 |
ZKH Group has higher revenue and earnings than Sprout Social. ZKH Group is trading at a lower price-to-earnings ratio than Sprout Social, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
9.5% of ZKH Group shares are owned by institutional investors. 9.6% of Sprout Social shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
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 ZKH Group
ZKH Group Limited develops and operates a maintenance, repair, and operating (MRO) products trading and service platform that offers spare parts, chemicals, manufacturing parts, general consumables, and office supplies in the People’s Republic of China. The company provides MRO procurement and management services; digitalized MRO procurement solutions; and logistics and warehousing services. It also engages in the production and sale of intelligent warehousing equipment. ZKH Group Limited was founded in 1998 and is based in Shanghai, the People’s Republic of China.
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