Gravity (NASDAQ:GRVY) and Marchex (NASDAQ:MCHX) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.

Valuation and Earnings

This table compares Gravity and Marchex’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gravity $132.68 million 0.92 $11.98 million N/A N/A
Marchex $90.29 million 1.20 -$6.08 million ($0.14) -18.57

Gravity has higher revenue and earnings than Marchex.

Analyst Recommendations

This is a summary of recent ratings and target prices for Gravity and Marchex, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gravity 0 0 0 0 N/A
Marchex 0 0 1 0 3.00

Profitability

This table compares Gravity and Marchex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gravity 8.07% 41.15% 18.85%
Marchex -3.35% -3.44% -2.87%

Risk and Volatility

Gravity has a beta of -0.12, meaning that its stock price is 112% less volatile than the S&P 500. Comparatively, Marchex has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Institutional and Insider Ownership

5.1% of Gravity shares are owned by institutional investors. Comparatively, 50.5% of Marchex shares are owned by institutional investors. 22.5% of Marchex shares are owned 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.

Summary

Gravity beats Marchex on 6 of the 11 factors compared between the two stocks.

Gravity Company Profile

Gravity Co., Ltd. develops, publishes, and distributes online games in South Korea, Japan, the United States, Canada, Taiwan, the Philippines, Thailand, Hong Kong, Macau, China, and internationally. It offers online games; mobile games and applications; and other games and game-related products and services, including character-based merchandise and animation. The company also provides massively multiplayer online role playing games. In addition, it provides console games and a game for Internet protocol television; and licenses the merchandizing rights of character-related products based on its online games. Further, the company markets dolls, stationery, food, and other character-based merchandise, as well as game manuals, monthly magazines, and other publications. Additionally, it provides Website development and operation services; and sells goods related to mobile phones. The company was founded in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.

Marchex Company Profile

Marchex, Inc. operates as a call analytics company. Its products include Marchex Call Analytics, an analytics technology platform that provides data and insights to measure the performance of mobile, online, and offline advertising for advertisers and small business resellers; and Marchex Speech Analytics delivers actionable operational and advertising insights of inbound calls from consumer's interactions. The company also provides Marchex Omnichannel Analytics Cloud products, such as Marchex Search Analytics, a product for search marketers that drive phone calls from search campaigns; Marchex Display and Video Analytics, a product for marketers that buy digital display advertising; Marchex Site Analytics; and Marchex Social Analytics. It offers Marchex Audience Targeting leverages call data and can automatically build audience segments for display and social media platforms; and Marchex Call Marketplace, a mobile advertising network for businesses that depend on inbound phone calls to drive sales, as well as offer advertisers ad placements across various mobile and online media sources to deliver qualified calls to their businesses. The company also provides Local Leads platform, a service advertising solution for small business resellers, such as Yellow Pages providers and vertical marketing service providers to sell call advertising, search marketing, and other lead generation products through their existing sales channels to small business advertisers. In addition, it offers lead services, including pay-for-call, search marketing, and ad creation, as well as include features, such as call tracking, geo-targeting, campaign management, reporting, and analytics. The company offers its services through direct sales, reseller partnerships, and referral agreements and technology integration partners worldwide. Marchex, Inc. was founded in 2003 and is headquartered in Seattle, Washington.

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