Financial Review: Upwork (NASDAQ:UPWK) vs. Tencent (OTCMKTS:TCEHY)

Tencent (OTCMKTS:TCEHY) and Upwork (NASDAQ:UPWK) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Tencent and Upwork, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tencent	0	0	3	1	3.25
Upwork	0	4	10	0	2.71

Tencent presently has a consensus price target of $102.00, suggesting a potential upside of 30.45%. Upwork has a consensus price target of $22.92, suggesting a potential upside of 14.13%. Given Tencent’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Tencent is more favorable than Upwork.

Institutional & Insider Ownership

0.0% of Tencent shares are held by institutional investors. Comparatively, 77.7% of Upwork shares are held by institutional investors. 7.5% of Upwork shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Tencent has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500. Comparatively, Upwork has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.

Earnings & Valuation

This table compares Tencent and Upwork”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tencent	$91.85 billion	7.78	$27.00 billion	$3.25	24.06
Upwork	$769.33 million	3.41	$215.59 million	$1.75	11.47

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

Profitability

This table compares Tencent and Upwork’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tencent	29.87%	19.47%	11.52%
Upwork	31.63%	41.05%	19.66%

Summary

Tencent beats Upwork on 8 of the 15 factors compared between the two stocks.

About Tencent

Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People's Republic of China and internationally. It operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. The company's consumers business provides communication and services, such as instant messaging and social network; digital content including online games, videos, live streaming, news, music, and literature; fintech services, which includes mobile payment, wealth management, loans, and securities trading; and various tools, such as network security management, browser, navigation, application management, email, etc. Its enterprise business comprises marketing solutions, which offers digital tools including user insight, creative management, placement strategy, and digital assets management; and cloud services, such as cloud computing, big data analytics, artificial intelligence, Internet of Things, security and other technologies for financial services, education, healthcare, retail, industry, transport, energy, and radio & television application. In addition, the company operates innovation business, which includes artificial intelligences; and discover and develops enterprise and next-generation technologies for food production, energy, and water management application. Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004. The company was founded in 1998 and is headquartered in Shenzhen, the People's Republic of China.

About Upwork

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally. The company’s work marketplace provides access to talent with various skills across a range of categories, including administrative support, sales and marketing, design and creative, and customer service, as well as web, mobile, and software development. Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. The company’s work marketplace offers access to various functionalities for remote engagements with talent, including communication and collaboration, ability to receive talent invoices through their work marketplace, and payment protection. Its marketplace offerings include Upwork Payroll and Upwork Enterprise, as well as managed and escrow services. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in San Francisco, California.