Critical Contrast: ZW Data Action Technologies (NASDAQ:CNET) vs. PubMatic (NASDAQ:PUBM)

ZW Data Action Technologies (NASDAQ:CNET) and PubMatic (NASDAQ:PUBM) are both small-cap business services companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings for ZW Data Action Technologies and PubMatic, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ZW Data Action Technologies	0	0	0	0	0.00
PubMatic	0	3	4	0	2.57

PubMatic has a consensus target price of $21.67, indicating a potential upside of 31.87%. Given PubMatic’s stronger consensus rating and higher possible upside, analysts plainly believe PubMatic is more favorable than ZW Data Action Technologies.

Volatility and Risk

ZW Data Action Technologies has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, PubMatic has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500.

Valuation and Earnings

This table compares ZW Data Action Technologies and PubMatic”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ZW Data Action Technologies	$24.40 million	0.17	-$5.97 million	($2.48)	-0.78
PubMatic	$282.25 million	2.89	$8.88 million	$0.36	45.64

PubMatic has higher revenue and earnings than ZW Data Action Technologies. ZW Data Action Technologies is trading at a lower price-to-earnings ratio than PubMatic, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ZW Data Action Technologies and PubMatic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ZW Data Action Technologies	-18.42%	-67.57%	-34.58%
PubMatic	7.08%	6.92%	3.07%

Insider & Institutional Ownership

0.0% of ZW Data Action Technologies shares are held by institutional investors. Comparatively, 64.3% of PubMatic shares are held by institutional investors. 14.2% of ZW Data Action Technologies shares are held by company insiders. Comparatively, 2.9% of PubMatic shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

PubMatic beats ZW Data Action Technologies on 13 of the 14 factors compared between the two stocks.

About ZW Data Action Technologies

ZW Data Action Technologies Inc., through its subsidiaries, offers omni-channel advertising, precision marketing, and data analysis management systems in the People’s Republic of China. The company offers Internet advertising, precision marketing, and related data services to small and medium enterprises through its Internet portals, including 28.com and liansuo.com that provide advertisers with tools to build sales channels in the form of franchisees, sales agents, distributors, and/or resellers. It also develops and operates blockchain technology-based products and services, as well as blockchain-based SaaS services that provides one-stop blockchain-powered enterprise management solutions in forms of NFT generations, data record, share, and storage module subscriptions, etc. In addition, the company offers other e-commerce O2O advertising, and marketing and related value-added technical services. Additionally, it offers online-content production, distribution, promotion, and live streamer training and management services. The company was formerly known as ChinaNet Online Holdings, Inc. and changed its name to ZW Data Action Technologies Inc. in October 2020. Data Action Technologies Inc. was founded in 2003 and is based in Beijing, the People’s Republic of China.

About PubMatic

PubMatic, Inc., a technology company, engages in the provision of a cloud infrastructure platform that enables real-time programmatic advertising transactions for digital content creators, advertisers, agencies, agency trading desks, and demand side platforms worldwide. Its PubMatic SSP, a sell-side platform, used for the purchase and sale of digital advertising inventory for publishers and buyers. The company also provides solutions, including OpenWrap, a header bidding solution; Openwrap OTT, a prebid-powered unified bidding solution; Openwrap SDK, an enterprise-grade management tools and analytics; Connect, a solution that provides additional data and insights to publishers and buyers; Activate, which allows buyers to execute direct deals on its platform across publisher inventory; Convert, a commerce media solution; and Identity Hub, an ID management tool for publishers that leverages specialized technology?infrastructure?to simplify the complex alternative identifier marketplace. Its platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. The company was incorporated in 2006 and is based in Redwood City, California.