Analyzing System1 (NYSE:SST) and Yalla Group (NYSE:YALA)

System1 (NYSE:SST) and Yalla Group (NYSE:YALA) are both small-cap business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, institutional ownership, risk, dividends and earnings.

Valuation and Earnings

This table compares System1 and Yalla Group’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
System1	$363.44 million	0.26	-$227.22 million	($2.27)	-0.46
Yalla Group	$324.09 million	1.85	$117.34 million	$0.70	5.41

Yalla Group has lower revenue, but higher earnings than System1. System1 is trading at a lower price-to-earnings ratio than Yalla Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

System1 has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Yalla Group has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares System1 and Yalla Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
System1	-53.92%	-53.12%	-14.48%
Yalla Group	39.64%	23.49%	20.73%

Institutional and Insider Ownership

87.5% of System1 shares are held by institutional investors. Comparatively, 4.7% of Yalla Group shares are held by institutional investors. 28.3% of System1 shares are held by company insiders. Comparatively, 52.2% of Yalla Group shares are held by company 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 Ratings

This is a summary of current recommendations for System1 and Yalla Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
System1	0	1	0	0	2.00
Yalla Group	0	0	0	0	N/A

System1 currently has a consensus target price of $2.00, suggesting a potential upside of 90.48%. Given System1’s higher probable upside, analysts clearly believe System1 is more favorable than Yalla Group.

Summary

Yalla Group beats System1 on 8 of the 12 factors compared between the two stocks.

About System1

System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.

About Yalla Group

Yalla Group Limited operates a social networking and gaming platform primarily in the Middle East and North Africa region. It provides mobile applications, including Yalla, a voice-centric group chat platform; and Yalla Ludo, a casual gaming application. The company's platform offers group chatting and games services; and sells virtual items, as well as provides upgrade services. The company was formerly known as FYXTech Corporation. Yalla Group Limited was founded in 2016 and is headquartered in Dubai, the United Arab Emirates.