Tucows (NASDAQ:TCX) versus Reddit (NYSE:RDDT) Critical Contrast

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

Institutional & Insider Ownership

73.6% of Tucows shares are held by institutional investors. 11.6% of Tucows shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Reddit and Tucows”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reddit	$1.30 billion	18.66	-$484.28 million	($7.73)	-17.35
Tucows	$356.14 million	0.63	-$112.67 million	($10.26)	-1.98

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Reddit and Tucows, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	1	9	11	1	2.55
Tucows	0	0	0	0	0.00

Reddit currently has a consensus target price of $175.95, suggesting a potential upside of 31.17%. Given Reddit’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Reddit is more favorable than Tucows.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Reddit	-37.25%	-24.71%	-22.52%
Tucows	-31.10%	N/A	-10.67%

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.

About Tucows

Tucows Inc. provides network access, domain name registration, email, mobile telephony, and other Internet services in North America and Europe. It operates in three segments: Ting, Wavelo and Tucows Domains. The Ting segment provides fiber and fixed wireless internet services. The Wavelo segment offers individual developer tools, subscription, billing management, network orchestration, and provisioning services. This segment also provides billing solutions under Platypus brand. The Tucows Domains segment offers name registration, as well as value added services under OpenSRS, eNom, Ascio, EPAG, and Hover brands. The company was formerly known as Infonautics, Inc. and changed its name to Tucows Inc. in August 2001. Tucows Inc. was incorporated in 1992 and is headquartered in Toronto, Canada.