Critical Review: AdTheorent (NASDAQ:ADTH) and Nextdoor (NYSE:KIND)

Nextdoor (NYSE:KIND – Get Rating) and AdTheorent (NASDAQ:ADTH – Get Rating) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Valuation and Earnings

This table compares Nextdoor and AdTheorent’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nextdoor	$212.76 million	3.59	-$137.92 million	($0.37)	-5.51
AdTheorent	$166.08 million	0.81	$29.34 million	$0.27	5.67

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

Profitability

This table compares Nextdoor and AdTheorent’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nextdoor	-64.82%	-20.71%	-18.21%
AdTheorent	17.67%	10.21%	7.34%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Nextdoor and AdTheorent, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nextdoor	0	4	0	0	2.00
AdTheorent	1	2	2	0	2.20

Nextdoor presently has a consensus target price of $3.92, indicating a potential upside of 92.16%. AdTheorent has a consensus target price of $3.57, indicating a potential upside of 133.43%. Given AdTheorent’s stronger consensus rating and higher possible upside, analysts clearly believe AdTheorent is more favorable than Nextdoor.

Volatility & Risk

Nextdoor has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, AdTheorent has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Insider & Institutional Ownership

28.3% of Nextdoor shares are held by institutional investors. Comparatively, 14.5% of AdTheorent shares are held by institutional investors. 41.9% of Nextdoor shares are held by insiders. Comparatively, 4.2% of AdTheorent shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

AdTheorent beats Nextdoor on 10 of the 14 factors compared between the two stocks.

About Nextdoor

(Get Rating)

Nextdoor Holdings, Inc. operates as the neighborhood network that connects neighbors, businesses, and public services in the United States and internationally. It enables small and mid-sized businesses, large brands, public agencies, and nonprofits to receive information, give and get help, and build connections. The company is headquartered in San Francisco, California.

About AdTheorent

(Get Rating)

AdTheorent Holding Company, Inc., a digital media platform, provides machine learning platform for advertisers and marketers in the United States and Canada. The company offers predictive targeting, geo-intelligence, and cross-environment map solutions, as well as Studio A\T. It serves pharmaceutical/healthcare, dining, retail, and travel and hospitality, as well as banking, financial services and insurance industries. The company was founded in 2012 and is headquartered in New York, New York.