Sohu.com (NASDAQ:SOHU – Get Free Report) and GRAVITY (NASDAQ:GRVY – Get Free Report) are both small-cap communication services companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.
Profitability
This table compares Sohu.com and GRAVITY’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sohu.com | 38.15% | 21.63% | 16.13% |
| GRAVITY | 14.92% | 12.70% | 10.85% |
Analyst Ratings
This is a summary of recent ratings and recommmendations for Sohu.com and GRAVITY, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sohu.com | 0 | 1 | 2 | 0 | 2.67 |
| GRAVITY | 0 | 1 | 0 | 0 | 2.00 |
Valuation & Earnings
This table compares Sohu.com and GRAVITY”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sohu.com | $589.97 million | 0.55 | $394.10 million | $8.57 | 1.45 |
| GRAVITY | $388.04 million | 1.23 | $47.22 million | $8.15 | 8.40 |
Sohu.com has higher revenue and earnings than GRAVITY. Sohu.com is trading at a lower price-to-earnings ratio than GRAVITY, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Sohu.com has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, GRAVITY has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.
Institutional & Insider Ownership
33.0% of Sohu.com shares are owned by institutional investors. Comparatively, 9.9% of GRAVITY shares are owned by institutional investors. 21.1% of Sohu.com shares are owned by company 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.
Summary
Sohu.com beats GRAVITY on 11 of the 14 factors compared between the two stocks.
About Sohu.com
Sohu.com Limited engages in the provision of online media, video, and game products and services on personal computers (PCs) and mobile devices in China. It operates through two segments: Sohu and Changyou. The company offers online news, information, and content services through the mobile phone application Sohu News APP, mobile portal m.sohu.com, and www.sohu.com for PCs; and online video content and services through mobile phone application Sohu Video APP and tv.sohu.com, as well as ifox, a video application for PC. It also operates Focus (www.focus.cn), which provides online real estate information and services; and 17173.com website, which provides news, electronic forums, online videos, and other online game information services to game players, as well as offers mobile game distribution services. In addition, the company offers interactive online games for PCs and mobile devices. Further, it provides paid subscription and interactive broadcasting services. The company was incorporated in 1996 and is headquartered in Beijing, China.
About GRAVITY
Gravity Co., Ltd. develops and publishes online and mobile games worldwide. It offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Landverse. Its mobile games portfolio includes Ragnarok M; Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; Ragnarok Arena; WITH ISLAND; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; Generation Zombie; Ragnarok Idle Adventure; Ragnarok 20 Heroes; White Chord; WITH: Whale In The High; Ragnarok Lost Memories; and Paladog Tactics. It also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; Pigromance for Steam, Stove, Nintendo Switch, Xbox One, Xbox Series X|S; ALTF4 11 for Steam and Stove; Wetory for Steam, Stove, Nintedo Switch; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin, and Kongsuni; and markets dolls, stationery, food, and other character based merchandises, as well as game manuals, monthly magazines, and other publications; PC games, including Puzzle Platformer, ALTF42, Ragnarok ZERO, KAMiBAKO-Mythology of Cube, Psychodemic, and FINAL KNIGHT; social network games and mobile games, such as Ragnarok V: Returns, Ragnarok: The Lost Memories and Ragnrok Begins in-house; and web-browser-based games, such as Ragnarok Prequel and Ragnarok Prequel II. Further, the company provides system development and maintenance services, as well as system integration services to third parties. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.
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