Critical Review: Perion Network (NASDAQ:PERI) and Saga Communications (NASDAQ:SGA)

Perion Network (NASDAQ:PERI) and Saga Communications (NASDAQ:SGA) are both small-cap communication services companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Institutional & Insider Ownership

68.1% of Perion Network shares are owned by institutional investors. Comparatively, 74.3% of Saga Communications shares are owned by institutional investors. 2.8% of Perion Network shares are owned by insiders. Comparatively, 23.2% of Saga Communications shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Perion Network and Saga Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Perion Network	-2.95%	2.39%	1.78%
Saga Communications	-8.24%	3.88%	2.90%

Analyst Ratings

This is a summary of recent recommendations and price targets for Perion Network and Saga Communications, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Perion Network	1	1	4	0	2.50
Saga Communications	1	2	0	0	1.67

Perion Network presently has a consensus price target of $13.88, indicating a potential upside of 44.68%. Given Perion Network’s stronger consensus rating and higher possible upside, analysts plainly believe Perion Network is more favorable than Saga Communications.

Valuation & Earnings

This table compares Perion Network and Saga Communications”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Perion Network	$439.93 million	0.85	-$7.93 million	($0.25)	-38.36
Saga Communications	$107.11 million	0.60	-$7.90 million	($1.35)	-7.52

Saga Communications has lower revenue, but higher earnings than Perion Network. Perion Network is trading at a lower price-to-earnings ratio than Saga Communications, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Perion Network has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Saga Communications has a beta of -0.1, indicating that its share price is 110% less volatile than the S&P 500.

Summary

Perion Network beats Saga Communications on 8 of the 14 factors compared between the two stocks.

About Perion Network

Perion Network Ltd. provides digital advertising solutions to brands, agencies, and publishers in North America, Europe, and internationally. It offers Wildfire, a content monetization platform; search monetization solutions, including website monetization, search mediation, and app monetization; and cross-channel digital advertising software as a service platform. The company also provides supply management platform; demand management platform for campaign planning and design; analytics platform, which provides information and performance insights; creative platform, a robust media platform; and an AI platform that uses machine learning to bring intelligence to the various phases of campaigns. In addition, it offers an actionable performance monitoring platform to support the various phases of campaign management; an online video player and integrated ad server to upload, manage, and stream video content; content monetization system, which integrates ads within the content layouts at the page level. Further, the company provides a publisher management system that provides analytics and performance optimization tools, as well as reports; search-demand management systems; monetization products that integrate and onboards demand vendors; and AI Systems. Additionally, it offers Intelligent HUB (iHUB), which connects the supply and demand sides of the marketplace; and strategic optimization of relevant traits (SORT), a provisional patent technology that eliminates the need for cookies. The company was formerly known as IncrediMail Ltd. and changed its name to Perion Network Ltd. in November 2011. Perion Network Ltd. was incorporated in 1999 and is headquartered in Holon, Israel.

About Saga Communications

Saga Communications, Inc., a media company, engages in acquiring, developing, and operating broadcast properties in the United States. The company's radio stations employ various programming formats, including classic hits, country, classic country, hot/soft/urban adult contemporary, oldies, classic rock, rock, and news/talk. It owns and operates FM and AM radio stations, and metro signals serving various markets. Saga Communications, Inc. was incorporated in 1986 and is headquartered in Grosse Pointe Farms, Michigan.