Analyzing Upwork (NASDAQ:UPWK) and Reddit (NYSE:RDDT)

Upwork (NASDAQ:UPWK) and Reddit (NYSE:RDDT) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Profitability

This table compares Upwork and Reddit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Upwork	10.00%	20.75%	7.42%
Reddit	N/A	N/A	N/A

Insider and Institutional Ownership

77.7% of Upwork shares are held by institutional investors. 7.6% of Upwork shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Upwork and Reddit, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upwork	0	2	8	0	2.80
Reddit	1	6	9	1	2.59

Upwork currently has a consensus target price of $15.70, suggesting a potential upside of 62.86%. Reddit has a consensus target price of $65.56, suggesting a potential upside of 9.22%. Given Upwork’s stronger consensus rating and higher possible upside, research analysts clearly believe Upwork is more favorable than Reddit.

Earnings & Valuation

This table compares Upwork and Reddit’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upwork	$689.14 million	1.85	$46.89 million	$0.35	27.54
Reddit	$981.41 million	10.00	-$90.82 million	N/A	N/A

Upwork has higher earnings, but lower revenue than Reddit.

Summary

Upwork beats Reddit on 8 of the 12 factors compared between the two stocks.

About Upwork

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally. The company’s work marketplace provides access to talent with various skills across a range of categories, including administrative support, sales and marketing, design and creative, and customer service, as well as web, mobile, and software development. Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. The company’s work marketplace offers access to various functionalities for remote engagements with talent, including communication and collaboration, ability to receive talent invoices through their work marketplace, and payment protection. Its marketplace offerings include Upwork Payroll and Upwork Enterprise, as well as managed and escrow services. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in San Francisco, California.

About Reddit

Reddit, Inc. operates a website that organizes digital communities. It organizes communities based on specific interests that enable users to engage in conversations by sharing experiences, submitting links, uploading images and videos, and replying to one another. The company was founded in 2005 and is headquartered in San Francisco, California.