Zillow Group (NASDAQ:Z) & Yelp (NYSE:YELP) Financial Analysis

Zillow Group (NASDAQ:Z) and Yelp (NYSE:YELP) are both communication services companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Zillow Group and Yelp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zillow Group	$2.58 billion	2.87	$23.00 million	$0.22	149.91
Yelp	$1.46 billion	0.74	$145.60 million	$2.09	9.56

Yelp has lower revenue, but higher earnings than Zillow Group. Yelp is trading at a lower price-to-earnings ratio than Zillow Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

71.0% of Zillow Group shares are held by institutional investors. Comparatively, 90.1% of Yelp shares are held by institutional investors. 25.0% of Zillow Group shares are held by company insiders. Comparatively, 8.3% of Yelp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Zillow Group and Yelp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zillow Group	1.96%	2.32%	1.97%
Yelp	8.59%	19.52%	13.44%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Zillow Group and Yelp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zillow Group	1	8	5	1	2.40
Yelp	3	3	1	0	1.71

Zillow Group presently has a consensus target price of $57.71, indicating a potential upside of 75.00%. Yelp has a consensus target price of $25.57, indicating a potential upside of 28.03%. Given Zillow Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Zillow Group is more favorable than Yelp.

Risk & Volatility

Zillow Group has a beta of 2.04, meaning that its stock price is 104% more volatile than the S&P 500. Comparatively, Yelp has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500.

Summary

Zillow Group beats Yelp on 9 of the 15 factors compared between the two stocks.

About Zillow Group

Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop and floor plans. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.

About Yelp

Yelp Inc. operates a platform that connects consumers with local businesses in the United States and internationally. The company's platform covers various categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services. It provides free and paid advertising products to businesses, which include cost-per-click advertising and multi-location Ad products, as well as enables businesses to deliver targeted advertising to large and high-intent audience; and business listing page products. The company also offers other services comprising Yelp Guest Manager, a subscription-based suite of front-of-house management tools for restaurants, nightlife and certain other venues, which include online reservations, a waitlist management solution that allows consumers to check wait times and join waitlists remotely, as well as through hostless kiosks, and seating and server rotation management tools; Yelp Knowledge program that offers business owners local analytics and insights through access to its historical data and other proprietary content; and Yelp Fusion, which offers free access to various basic information through publicly available APIs, and paid access to content and data for consumer-facing enterprise use. In addition, it provides content licensing, as well as allows third-party data providers to update and manage business listing information on behalf of businesses. Further, the company offers its products directly through its sales force; indirectly through partners; and online through its website and business app, as well as non-advertising partner arrangements. It has partnership with Grubhub for providing consumers with a service to place food orders for pickup and delivery. The company was incorporated in 2004 and is based in San Francisco, California.