System1 (NYSE:SST) vs. Locafy (NASDAQ:LCFY) Financial Comparison

Locafy (NASDAQ:LCFY) and System1 (NYSE:SST) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.

Insider & Institutional Ownership

0.0% of Locafy shares are held by institutional investors. Comparatively, 87.5% of System1 shares are held by institutional investors. 28.7% of Locafy shares are held by company insiders. Comparatively, 28.3% of System1 shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Locafy	-66.21%	-82.35%	-45.02%
System1	-49.23%	-42.08%	-12.99%

Volatility and Risk

Locafy has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, System1 has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Locafy and System1, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Locafy	0	0	0	0	N/A
System1	0	1	1	0	2.50

System1 has a consensus price target of $3.50, suggesting a potential upside of 130.26%. Given System1’s higher probable upside, analysts plainly believe System1 is more favorable than Locafy.

Earnings and Valuation

This table compares Locafy and System1’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Locafy	$4.21 million	0.78	-$2.62 million	($1.87)	-1.37
System1	$401.97 million	0.34	-$227.22 million	($2.27)	-0.67

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

Summary

System1 beats Locafy on 9 of the 13 factors compared between the two stocks.

About Locafy

Locafy Limited operates as a software-as-a-service company (SaaS) that specializes in search engine marketing in Australia, New Zealand, Europe, North America, and internationally. The company operates in three segments: Publishing, Direct Sales, and Reseller Sales. It focuses on commercializing its SaaS online publishing technology platform that comprises an integrated suite of solutions. The company also owns and operates several online directories and offers search engine optimization solutions, which include creation of proximity pages and proximity networks, local pages, and map pack booster. In addition, its platform publishes content to various devices that uses a web browser to display web content, as well as programmatically optimizes the published content for local search. The company offers its solutions directly to customers, as well as through digital agencies and search engine optimization freelancers. The company was formerly known as Moboom Limited and changed its name to Locafy Limited in January 2021. Locafy Limited was incorporated in 2009 and is based in Subiaco, Australia.

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.