NerdWallet (NASDAQ:NRDS) & Skillz (NYSE:SKLZ) Critical Analysis

NerdWallet (NASDAQ:NRDS) and Skillz (NYSE:SKLZ) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NerdWallet	$599.00 million	1.63	-$11.80 million	($0.17)	-74.00
Skillz	$150.11 million	0.66	-$101.36 million	($5.11)	-1.11

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

Insider and Institutional Ownership

38.8% of NerdWallet shares are held by institutional investors. Comparatively, 19.4% of Skillz shares are held by institutional investors. 45.9% of NerdWallet shares are held by insiders. Comparatively, 22.7% of Skillz shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares NerdWallet and Skillz’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NerdWallet	-1.85%	-2.98%	-2.56%
Skillz	-47.40%	-43.56%	-22.71%

Volatility & Risk

NerdWallet has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500. Comparatively, Skillz has a beta of 2.78, suggesting that its share price is 178% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for NerdWallet and Skillz, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NerdWallet	0	2	4	0	2.67
Skillz	0	2	2	0	2.50

NerdWallet currently has a consensus target price of $16.00, indicating a potential upside of 27.19%. Skillz has a consensus target price of $10.67, indicating a potential upside of 88.62%. Given Skillz’s higher probable upside, analysts plainly believe Skillz is more favorable than NerdWallet.

Summary

NerdWallet beats Skillz on 11 of the 14 factors compared between the two stocks.

About NerdWallet

NerdWallet, Inc. operates a digital platform that provides consumer-driven advice about personal finance by connecting individuals and small and mid-sized businesses with financial products providers in the United States, the United Kingdom, Australia, and Canada. Its platform offers guidance to consumers through educational content, tools and calculators, and product marketplaces, as well as through NerdWallet app for various financial products, including credit cards, mortgages, insurance, SMB products, personal loans, banking, investing, and student loans. The company was founded in 2009 and is based in San Francisco, California.

About Skillz

Skillz Inc. operates a mobile game platform in the United States and internationally. The company primarily develops and supports a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity to end-users. The company distributes games through direct app download from its website, as well as through third-party platforms. Skillz Inc. was founded in 2012 and is based in San Francisco, California.