Contrasting Weibo (WB) & Netflix (NFLX)

Weibo (NASDAQ: WB) and Netflix (NASDAQ:NFLX) are both large-cap technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Profitability

This table compares Weibo and Netflix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Weibo 30.66% 35.57% 21.46%
Netflix 4.78% 17.20% 3.34%

Analyst Recommendations

This is a summary of recent ratings and price targets for Weibo and Netflix, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Weibo 0 0 8 0 3.00
Netflix 3 14 32 0 2.59

Weibo presently has a consensus price target of $118.50, suggesting a potential downside of 12.05%. Netflix has a consensus price target of $238.32, suggesting a potential downside of 14.43%. Given Weibo’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Weibo is more favorable than Netflix.

Volatility and Risk

Weibo has a beta of 2.63, indicating that its share price is 163% more volatile than the S&P 500. Comparatively, Netflix has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Institutional and Insider Ownership

22.1% of Weibo shares are held by institutional investors. Comparatively, 82.4% of Netflix shares are held by institutional investors. 4.9% of Netflix shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Weibo and Netflix’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Weibo $1.15 billion 25.92 $108.02 million $1.55 86.93
Netflix $11.69 billion 10.34 $558.92 million $1.25 222.82

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

Summary

Weibo beats Netflix on 8 of the 14 factors compared between the two stocks.

About Weibo

Weibo Corporation is a social media platform for people to create, distribute and discover Chinese-language content. The Company provides ways for people and organizations to publicly express themselves in real time, interact with others on a global platform and stay connected with the world. It operates in two segments: advertising and marketing services and other services. It offers self-expression products that enable its users to express themselves on its platform; social products to promote social interaction between users on its platform; discovery products to help users discover content on its platform, and notifications to notify users on Weibo account activities through short message service (SMS) or push notification on their device. It offers advertising and marketing solutions to enable its customers to promote their brands and conduct marketing activities. It offers its platform partners with tools and application programming interfaces (APIs).

About Netflix

Netflix, Inc. is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States. The Domestic DVD segment includes services, such as digital optical disc (DVD)-by-mail. The Company’s members can watch original series, documentaries, feature films, as well as television shows and movies directly on their Internet-connected screen, televisions, computers and mobile devices. It offers its streaming services both domestically and internationally. In the United States, its members can receive DVDs delivered to their homes. The Company had members streaming in over 190 countries, as of December 31, 2016.

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