GRAVITY (NASDAQ:GRVY) and GCL Global (NASDAQ:GCL) Critical Contrast

GCL Global (NASDAQ:GCL) and GRAVITY (NASDAQ:GRVY) are both small-cap communication services companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Insider and Institutional Ownership

36.5% of GCL Global shares are owned by institutional investors. Comparatively, 9.9% of GRAVITY shares are owned by institutional investors. 49.4% of GCL Global shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares GCL Global and GRAVITY’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GCL Global	N/A	N/A	N/A
GRAVITY	14.92%	12.70%	10.85%

Earnings and Valuation

This table compares GCL Global and GRAVITY”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GCL Global	$238.92 million	0.62	-$25.00 million	$0.01	116.50
GRAVITY	$388.04 million	1.28	$47.22 million	$8.15	8.79

GRAVITY has higher revenue and earnings than GCL Global. GRAVITY is trading at a lower price-to-earnings ratio than GCL Global, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

GCL Global has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, GRAVITY has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for GCL Global and GRAVITY, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCL Global	1	0	0	0	1.00
GRAVITY	0	1	0	0	2.00

Summary

GRAVITY beats GCL Global on 9 of the 12 factors compared between the two stocks.

About GCL Global

GCL Global Limited is a video game company focused on the publishing, distribution and commercialization of interactive entertainment products. The company works with game developers and publishers to bring video games to consumers through digital storefronts, physical retail channels and other distribution platforms. Its activities include game localization, marketing, sales and distribution, with an emphasis on adapting products for regional audiences and market conditions. GCL Global serves international markets, including parts of Southeast Asia and other emerging gaming regions, through relationships with content owners, platform operators and retail partners.

About GRAVITY

GRAVITY Co., Ltd. is a South Korean game developer and publisher founded in 2000 and headquartered in Seoul. The company develops and distributes online and mobile games, with a portfolio centered on the Ragnarok franchise. Its best-known title is the massively multiplayer online role-playing game Ragnarok Online. The franchise also includes mobile and online games such as Ragnarok M: Eternal Love, Ragnarok Origin and Ragnarok X: Next Generation. GRAVITY serves players in South Korea and international markets through its own operations, subsidiaries and publishing or licensing partners.