Reviewing Alphabet (NASDAQ:GOOGL) and System1 (NYSE:SST)

Alphabet (NASDAQ:GOOGL) and System1 (NYSE:SST) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Valuation & Earnings

This table compares Alphabet and System1’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alphabet	$307.39 billion	7.45	$73.80 billion	$6.52	28.41
System1	$401.97 million	0.32	-$227.22 million	($2.27)	-0.63

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.

Profitability

This table compares Alphabet and System1’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alphabet	25.90%	29.52%	20.74%
System1	-49.23%	-42.08%	-12.99%

Risk and Volatility

Alphabet has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, System1 has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Alphabet and System1, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alphabet	0	6	29	1	2.86
System1	0	1	1	0	2.50

Alphabet currently has a consensus price target of $193.66, suggesting a potential upside of 4.54%. System1 has a consensus price target of $3.50, suggesting a potential upside of 144.76%. Given System1’s higher possible upside, analysts plainly believe System1 is more favorable than Alphabet.

Institutional & Insider Ownership

40.0% of Alphabet shares are held by institutional investors. Comparatively, 87.5% of System1 shares are held by institutional investors. 11.6% of Alphabet shares are held by company insiders. Comparatively, 28.3% of System1 shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Alphabet beats System1 on 11 of the 15 factors compared between the two stocks.

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.

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.