Reviewing GDS (NASDAQ:GDS) and Backblaze (NASDAQ:BLZE)

Backblaze (NASDAQ:BLZE) and GDS (NASDAQ:GDS) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Volatility & Risk

Backblaze has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, GDS has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500.

Profitability

This table compares Backblaze and GDS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Backblaze	-13.07%	-16.73%	-7.10%
GDS	30.70%	17.94%	6.11%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Backblaze and GDS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Backblaze	1	1	8	0	2.70
GDS	0	2	3	1	2.83

Backblaze presently has a consensus target price of $19.71, indicating a potential upside of 46.57%. GDS has a consensus target price of $48.12, indicating a potential upside of 53.43%. Given GDS’s stronger consensus rating and higher probable upside, analysts plainly believe GDS is more favorable than Backblaze.

Earnings and Valuation

This table compares Backblaze and GDS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Backblaze	$145.84 million	5.71	-$25.61 million	($0.34)	-39.56
GDS	$12.26 billion	0.51	$132.10 million	$2.15	14.59

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

Insider and Institutional Ownership

54.0% of Backblaze shares are owned by institutional investors. Comparatively, 33.7% of GDS shares are owned by institutional investors. 4.2% of Backblaze shares are owned by insiders. Comparatively, 8.0% of GDS shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

GDS beats Backblaze on 11 of the 15 factors compared between the two stocks.

About Backblaze

Backblaze, Inc., a storage cloud platform, provides businesses and consumers cloud services to store, use, and protect data in the United States and internationally. The company offers cloud services through a web-scale software infrastructure built on commodity hardware. It also provides Backblaze B2 Cloud Storage, which enables customers to store data, developers to build applications, and partners to expand their use cases. This service is offered as a consumption-based Infrastructure-as-a-Service (IaaS) and serves use cases, such as public, hybrid, and multi-cloud data storage; application development and DevOps; content delivery and edge computing; security and ransomware protection; media management; backup, archive, and tape replacement; repository for analytics, artificial intelligence and machine learning; and Internet of Things. In addition, the company offers Backblaze Computer Backup that automatically backs up data from laptops and desktops for businesses and individuals, which provides a subscription-based Software-as-a-Service and serves use cases, including computer backup, ransomware protection, theft and loss protection, and remote access. It serves the public cloud IaaS storage and Data-Protection-as-a-Service markets. The company was incorporated in 2007 and is headquartered in San Mateo, California.

About GDS

GDS Holdings Limited, together with its subsidiaries, develops and operates data centers in the People's Republic of China. The company provides colocation services comprising critical facilities space, customer-available power, racks, and cooling; managed hosting services, including business continuity and disaster recovery, network management, data storage, system security, operating system, database, and server middleware services; managed cloud services; and consulting services. It serves cloud service providers, large Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. GDS Holdings Limited was founded in 2001 and is headquartered in Shanghai, the People's Republic of China.