Critical Contrast: Sogou (SOGO) and RealNetworks (RNWK)

Sogou (NYSE: SOGO) and RealNetworks (NASDAQ:RNWK) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.

Insider and Institutional Ownership

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8.0% of Sogou shares are owned by institutional investors. Comparatively, 52.6% of RealNetworks shares are owned by institutional investors. 37.9% of RealNetworks shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Sogou and RealNetworks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sogou N/A N/A N/A
RealNetworks -14.49% -26.17% -17.36%

Valuation and Earnings

This table compares Sogou and RealNetworks’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sogou $908.36 million 3.74 $82.20 million $0.29 29.48
RealNetworks $78.72 million 1.62 -$16.30 million N/A N/A

Sogou has higher revenue and earnings than RealNetworks.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sogou 0 1 2 0 2.67
RealNetworks 0 0 1 0 3.00

Sogou currently has a consensus price target of $13.77, indicating a potential upside of 61.01%. RealNetworks has a consensus price target of $6.50, indicating a potential upside of 90.06%. Given RealNetworks’ stronger consensus rating and higher possible upside, analysts plainly believe RealNetworks is more favorable than Sogou.

Summary

Sogou beats RealNetworks on 7 of the 11 factors compared between the two stocks.

Sogou Company Profile

Sogou Inc. provides search and search-related services in the People's Republic of China. The company provides Sogou Search, a search engine; and Sogou Input Method, a Chinese language input software for mobile and PC MAUs. It also offers search and search-related advertising services; Internet value-added services related to the operation of Web games and mobile games developed by third parties; and online reading services, as well as other products and services, including smart hardware products. The company was incorporated in 2005 and is based in Beijing, the People's Republic of China. Sogou Inc. is a subsidiary of Sohu.com Inc.

RealNetworks Company Profile

RealNetworks, Inc. creates applications and services that enable to connect with digital media. The Company connects consumers with their digital media directly and through partners, focusing on supporting various network, devices, media types and social networks. It operates through three segments: Consumer Media, Mobile Services and Games. Within its Consumer Media business, its RealPlayer media player software includes features and services that enable consumers to discover, play, download, manage and edit digital video, stream audio and video, download and save photos and videos from the Web, transfer and share content on social networks, and edit their own photo and video content. The Mobile Services segment consists of digital media services it provides to mobile and online service providers as software as a service offerings. It develops, publishes, licenses and distributes casual games.

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