Critical Analysis: YY (YY) vs. Autohome (ATHM)

YY (NASDAQ: YY) and Autohome (NYSE:ATHM) are both mid-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Volatility and Risk

YY has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Autohome has a beta of 2.06, suggesting that its share price is 106% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for YY and Autohome, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
YY 1 3 9 0 2.62
Autohome 0 0 3 0 3.00

YY currently has a consensus price target of $82.83, indicating a potential downside of 27.24%. Autohome has a consensus price target of $72.27, indicating a potential upside of 12.64%. Given Autohome’s stronger consensus rating and higher probable upside, analysts clearly believe Autohome is more favorable than YY.

Institutional and Insider Ownership

56.9% of YY shares are held by institutional investors. Comparatively, 38.8% of Autohome shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares YY and Autohome’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
YY 22.23% 34.26% 22.11%
Autohome 25.52% 23.48% 16.58%

Earnings and Valuation

This table compares YY and Autohome’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
YY $1.18 billion 6.07 $219.49 million $5.79 19.66
Autohome $338.13 million 22.42 $176.85 million $2.07 31.00

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

Summary

YY beats Autohome on 7 of the 13 factors compared between the two stocks.

About YY

YY Inc. (YY) is a social platform that engages users in real-time online group activities through voice, video and text on personal computers and mobile devices. The Company’s segments include YY IVAS and others, Huya broadcasting, and 100 Education. YY enables users to create and organize groups of varying sizes to discover and participate in a range of online activities, including music shows, online games, dating shows, live game broadcasting and e-learning. YY offers users an entertainment experience through its social community. It owns the domain names of YY.com, Duowan.com, 100.com, Huya.com, Edu24ol.com and Zhiniu8.com. The Company’s YY platform, including YY.com, is jointly operated by personnel from Guangzhou Huaduo and Zhuhai Duowan. Its product, YY Client, enables users to engage in live interactions online. Its Web-based YY enables users to conduct real-time interactions through Web browsers without requiring any downloads or installations.

About Autohome

Autohome Inc. is an online destination for automobile consumers in China. The Company is engaged in the provision of online advertising and dealer subscription services in the People’s Republic of China (PRC). The Company, through its Websites, autohome.com.cn and che168.com, and mobile applications, delivers content to automobile buyers and owners. These services are offered to automakers and dealers, and advertising agencies that represent automakers and dealers in the automobile industry. The Company’s autohome.com.cn targets automobile consumers with a focus on new automobiles. The Company’s professionally produced content is created by editorial team and includes automobile-related articles and reviews, pricing trends in various local markets, and photos and video clips. Its database also includes new and used automobile listings and promotional information. Its dealer subscription services allow dealers to market their inventory and services through its Websites.

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