Comparing The9 (NCTY) and The Competition

The9 (NASDAQ:NCTY) is one of 957 publicly-traded companies in the “Software” industry, but how does it weigh in compared to its competitors? We will compare The9 to similar businesses based on the strength of its analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Risk and Volatility

The9 has a beta of 2.02, meaning that its share price is 102% more volatile than the S&P 500. Comparatively, The9’s competitors have a beta of 1.26, meaning that their average share price is 26% more volatile than the S&P 500.

Institutional and Insider Ownership

0.5% of The9 shares are held by institutional investors. Comparatively, 42.0% of shares of all “Software” companies are held by institutional investors. 30.8% of The9 shares are held by company insiders. Comparatively, 19.9% of shares of all “Software” companies are held by company 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.

Profitability

This table compares The9 and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The9	N/A	N/A	N/A
The9 Competitors	-629.60%	25.64%	-9.11%

Analyst Recommendations

This is a summary of current ratings and target prices for The9 and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The9	1	0	0	0	1.00
The9 Competitors	5602	21226	44328	1467	2.57

As a group, “Software” companies have a potential upside of 329.62%. Given The9’s competitors stronger consensus rating and higher possible upside, analysts clearly believe The9 has less favorable growth aspects than its competitors.

Valuation and Earnings

This table compares The9 and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
The9	$15.43 million	-$57.55 million	0.56
The9 Competitors	$1.81 billion	$386.83 million	106.68

The9’s competitors have higher revenue and earnings than The9. The9 is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

The9 competitors beat The9 on 9 of the 13 factors compared.

About The9

The9 Limited operates as a cryptocurrency mining business in China, Eastern Europe, Asia, and North America. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was incorporated in 1999 and is headquartered in Shanghai, the People’s Republic of China.