Head to Head Review: PubMatic (NASDAQ:PUBM) & Grom Social Enterprises (NASDAQ:GROM)

Grom Social Enterprises (NASDAQ:GROM) and PubMatic (NASDAQ:PUBM) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Risk and Volatility

Grom Social Enterprises has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500. Comparatively, PubMatic has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Grom Social Enterprises and PubMatic, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grom Social Enterprises	0	0	0	0	0.00
PubMatic	0	4	6	0	2.60

PubMatic has a consensus target price of $19.89, indicating a potential upside of 109.80%. Given PubMatic’s stronger consensus rating and higher possible upside, analysts clearly believe PubMatic is more favorable than Grom Social Enterprises.

Valuation & Earnings

This table compares Grom Social Enterprises and PubMatic”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grom Social Enterprises	$3.72 million	0.00	-$12.53 million	($11.67)	0.00
PubMatic	$291.26 million	1.58	$8.88 million	$0.23	41.22

PubMatic has higher revenue and earnings than Grom Social Enterprises. Grom Social Enterprises 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 Grom Social Enterprises and PubMatic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grom Social Enterprises	N/A	N/A	N/A
PubMatic	5.96%	6.12%	2.58%

Insider & Institutional Ownership

15.9% of Grom Social Enterprises shares are owned by institutional investors. Comparatively, 64.3% of PubMatic shares are owned by institutional investors. 0.0% of Grom Social Enterprises shares are owned by insiders. Comparatively, 2.9% of PubMatic shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

PubMatic beats Grom Social Enterprises on 13 of the 14 factors compared between the two stocks.

About Grom Social Enterprises

Grom Social Enterprises, Inc., through its subsidiaries, operates as a media, technology, and entertainment company in the United States and Philippines. It operates through three segments: Animation, Original Content, and Social and Technology. The company operates a social media network for children under the age of 13 years. It also produces animated films and televisions series; and provides web filtering services to schools and government agencies, as well as acquires, develops, and builds commercial potential of kids and family entertainment properties and associated business opportunities. Grom Social Enterprises, Inc. was founded in 2012 and is headquartered in Boca Raton, Florida.

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.