Tucows (NASDAQ:TCX – Get Free Report) and Similarweb (NYSE:SMWB – 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 risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.
Risk and Volatility
Tucows has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Similarweb has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.
Earnings & Valuation
This table compares Tucows and Similarweb”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Tucows | $390.30 million | 0.43 | -$75.82 million | ($7.10) | -2.14 |
| Similarweb | $282.60 million | 1.29 | -$32.94 million | ($0.35) | -11.85 |
Similarweb has lower revenue, but higher earnings than Tucows. Similarweb is trading at a lower price-to-earnings ratio than Tucows, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Tucows and Similarweb, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tucows | 1 | 0 | 0 | 0 | 1.00 |
| Similarweb | 1 | 7 | 3 | 0 | 2.18 |
Similarweb has a consensus price target of $7.07, suggesting a potential upside of 70.56%. Given Similarweb’s stronger consensus rating and higher probable upside, analysts clearly believe Similarweb is more favorable than Tucows.
Institutional & Insider Ownership
73.6% of Tucows shares are held by institutional investors. Comparatively, 57.6% of Similarweb shares are held by institutional investors. 8.4% of Tucows shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Tucows and Similarweb’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tucows | -20.08% | N/A | -9.18% |
| Similarweb | -10.38% | -48.57% | -4.45% |
Summary
Similarweb beats Tucows on 9 of the 14 factors compared between the two stocks.
About Tucows
Tucows Inc. provides network access, domain name registration, email, mobile telephony, and other Internet services in North America and Europe. It operates in three segments: Ting, Wavelo and Tucows Domains. The Ting segment provides fiber and fixed wireless internet services. The Wavelo segment offers individual developer tools, subscription, billing management, network orchestration, and provisioning services. This segment also provides billing solutions under Platypus brand. The Tucows Domains segment offers name registration, as well as value added services under OpenSRS, eNom, Ascio, EPAG, and Hover brands. The company was formerly known as Infonautics, Inc. and changed its name to Tucows Inc. in August 2001. Tucows Inc. was incorporated in 1992 and is headquartered in Toronto, Canada.
About Similarweb
Similarweb Ltd. provides cloud-based digital intelligence solutions in the United States, Europe, the Asia Pacific, the United Kingdom, Israel, and internationally. The company offers digital research intelligence solutions for its customers to benchmark performance against competitors and market leaders, analyze trends in the market, conduct deeper research into specific companies, and analyze audience behavior; and digital marketing intelligence solutions for its customers to understand their competitors' online acquisition strategies in each marketing channel, and optimize their own strategies. It also provides sales intelligence solutions for its customers to access relevant buying signals and digital insights of their customers to generate leads quickly; and shopper intelligence solutions for its customers to analyze a view of their customers' digital journeys, monitor consumer demand, increase brand visibility in the search process, and optimize category and product level conversion in the purchase process. In addition, the company offers investor intelligence solutions for its customers to access an end-to-end view of market, sector, and company performance to ideate and monitor investment opportunities; forecast market performance; and perform due diligence. Further, it provides data-as-a-service and advisory services. The company serves retail, consumer packaged goods, consumer finance, consultancies, marketing and advertising agencies, media and publishers, business-to-business software, payment processors, travel, and institutional investors. Similarweb Ltd. was incorporated in 2009 and is headquartered in Givatayim, Israel.
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