Spotify Technology (NYSE:SPOT) versus Emmis Communications (NYSE:EMMS) Head-To-Head Review

Spotify Technology (NYSE:SPOT) and Emmis Communications (NASDAQ:EMMS) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Institutional and Insider Ownership

45.4% of Spotify Technology shares are held by institutional investors. Comparatively, 36.5% of Emmis Communications shares are held by institutional investors. 32.3% of Emmis Communications shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Spotify Technology and Emmis Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spotify Technology 0 0 3 0 3.00
Emmis Communications 0 0 0 0 N/A

Spotify Technology currently has a consensus price target of $172.33, indicating a potential upside of 24.34%. Given Spotify Technology’s higher probable upside, equities analysts plainly believe Spotify Technology is more favorable than Emmis Communications.

Profitability

This table compares Spotify Technology and Emmis Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Spotify Technology -1.08% 13.72% 5.62%
Emmis Communications 20.46% 23.10% 9.59%

Valuation and Earnings

This table compares Spotify Technology and Emmis Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Spotify Technology $6.21 billion 3.97 -$92.11 million ($0.60) -231.00
Emmis Communications $114.13 million 0.46 $23.35 million N/A N/A

Emmis Communications has lower revenue, but higher earnings than Spotify Technology.

Risk and Volatility

Spotify Technology has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500. Comparatively, Emmis Communications has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Spotify Technology Company Profile

Spotify Technology S.A., together with its subsidiaries, provides music streaming services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers commercial-free music services to subscribers comprising unlimited online and offline high-quality streaming access to its catalog. The Ad-Supported segment provides ad-supported users with limited on-demand online access to its catalog. As of December 31, 2018, the company's platform included 207 million monthly active users and 96 million premium subscribers in approximately 78 countries and territories. Spotify Technology S.A. was founded in 2006 and is based in Luxembourg City, Luxembourg.

Emmis Communications Company Profile

Emmis Communications Corporation, a diversified media company, engages in radio broadcasting activities in the United States. The company operates in three segments: Radio, Publishing, and Corporate & Emerging Technologies. It operates 11 FM and 3 AM radio stations in New York, Los Angeles, Indianapolis, and Austin, as well as publishes Indianapolis monthly magazine. The company also develops and licenses TagStation, a cloud-based software platform that allows a broadcaster to manage album art, meta data, and enhanced advertising on its various broadcasts; and develops NextRadio, a smartphone application that marries over-the-air FM radio broadcasts with visual and interactive features on smartphones. In addition, it provides Dial Report that offers radio advertising buyers and sellers big data analytics derived from radio station network, smartphone usage, location-based data, listening data, and demographic and behavioral attributes; and engages in dynamic pricing business. Emmis Communications Corporation was founded in 1981 and is based in Indianapolis, Indiana.

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