System1 (NYSE:SST – Get Free Report) and Alphabet (NASDAQ:GOOGL – Get Free Report) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.
Institutional & Insider Ownership
87.5% of System1 shares are held by institutional investors. Comparatively, 40.0% of Alphabet shares are held by institutional investors. 28.3% of System1 shares are held by company insiders. Comparatively, 11.6% of Alphabet shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares System1 and Alphabet’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| System1 | -49.23% | -42.08% | -12.99% |
| Alphabet | 25.90% | 29.52% | 20.74% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| System1 | 0 | 1 | 1 | 0 | 2.50 |
| Alphabet | 0 | 5 | 30 | 1 | 2.89 |
System1 presently has a consensus price target of $3.50, indicating a potential upside of 131.79%. Alphabet has a consensus price target of $193.26, indicating a potential upside of 7.59%. Given System1’s higher possible upside, analysts plainly believe System1 is more favorable than Alphabet.
Risk and Volatility
System1 has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, Alphabet has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.
Valuation & Earnings
This table compares System1 and Alphabet’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| System1 | $401.97 million | 0.34 | -$227.22 million | ($2.27) | -0.67 |
| Alphabet | $318.15 billion | 6.98 | $73.80 billion | $6.52 | 27.55 |
Alphabet has higher revenue and earnings than System1. System1 is trading at a lower price-to-earnings ratio than Alphabet, indicating that it is currently the more affordable of the two stocks.
Summary
Alphabet beats System1 on 11 of the 15 factors compared between the two stocks.
About System1
System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.
About Alphabet
Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.
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