Snap Inc. (SNAP) vs Spotify Technology (SPOT)

Snap Inc. and Spotify Technology are both Internet Content & Information companies. Spotify Technology is the larger, with a market value of $108.4B against $9.9B — 10.9× the size. Snap Inc. has negative trailing earnings, so its P/E is not meaningful; Spotify Technology trades at 28.0×. Spotify Technology grew revenue faster over the last twelve months: 16.8% against 12.7%. Spotify Technology has the higher net margin (18.2% vs −4.90%) and the higher return on invested capital (0.00% vs −7.22%). Across the 19 metrics below, Spotify Technology leads on 11 and Snap Inc. on 8.

Valuation

Metric SNAP SPOT Internet Content & Information median
P/E n/m 27.97 10.85
P/S 1.63 5.15 0.90
P/B 5.38 11.17 1.25
Price to free cash flow 14.91 29.10 9.41
EV/EBITDA n/m 30.99 8.63
EV/Sales 1.77 4.70 1.17
Earnings yield (2.89%) 3.58% (2.34%)
Free cash flow yield 6.71% 3.44% 2.24%

Profitability

Metric SNAP SPOT Internet Content & Information median
Gross margin 57.33% 32.79% 66.84%
Operating margin (5.10%) 14.61% (3.41%)
Net margin (4.90%) 18.18% (3.02%)
Free cash flow margin 11.11% 17.71% 1.75%
Return on equity (15.58%) 44.47% 0.00%
Return on assets (4.19%) 24.57% (0.36%)
Return on invested capital (7.22%) 0.00% 0.00%

Growth

Metric SNAP SPOT Internet Content & Information median
Revenue growth (TTM) 12.65% 16.83% 2.65%
EPS growth (last fiscal year) 35.71% 99.83% 34.45%
Revenue growth, 5-year CAGR 18.80% 16.65% 9.73%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric SNAP SPOT Internet Content & Information median
Debt to equity 1.83 0.00 0.01
Current ratio 2.94 2.11 1.82
Net debt to EBITDA (1.65) (4.12) (0.48)

Dividend

Metric SNAP SPOT Internet Content & Information median
Dividend yield — — 1.11%
Payout ratio — — 0.28

Size

Metric SNAP SPOT Internet Content & Information median
Market cap 9.91b 108.38b 310.61m

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