NetEase (NASDAQ:NTES) and InterCloud Systems (NASDAQ:ICLD) Head to Head Review

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NetEase (NASDAQ:NTES) and InterCloud Systems (OTCMKTS:ICLD) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Profitability

This table compares NetEase and InterCloud Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NetEase 11.86% 18.39% 9.97%
InterCloud Systems N/A N/A N/A

Institutional & Insider Ownership

46.9% of NetEase shares are owned by institutional investors. 54.7% of NetEase shares are owned by insiders. Comparatively, 0.5% of InterCloud Systems shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares NetEase and InterCloud Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NetEase $9.77 billion 3.75 $930.91 million $6.87 41.63
InterCloud Systems $34.52 million 0.01 -$44.33 million N/A N/A

NetEase has higher revenue and earnings than InterCloud Systems.

Risk and Volatility

NetEase has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, InterCloud Systems has a beta of 2.87, indicating that its stock price is 187% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for NetEase and InterCloud Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NetEase 0 2 11 0 2.85
InterCloud Systems 0 0 0 0 N/A

NetEase currently has a consensus target price of $292.68, suggesting a potential upside of 2.32%. Given NetEase’s higher probable upside, equities analysts plainly believe NetEase is more favorable than InterCloud Systems.

Dividends

NetEase pays an annual dividend of $4.15 per share and has a dividend yield of 1.5%. InterCloud Systems does not pay a dividend. NetEase pays out 60.4% of its earnings in the form of a dividend.

Summary

NetEase beats InterCloud Systems on 11 of the 13 factors compared between the two stocks.

NetEase Company Profile

NetEase, Inc. operates an interactive online community in the People's Republic of China. The company operates in four segments: Online Games Services, E-Commerce, Advertising Services, and Innovative Businesses and Other Services. It offers various games in a range of genres through mobile devices and PCs, including role-playing games, MMORPGs, battle arena games, simulation games, collectible card games, first-person shooter games, sandbox games, and other types of games to the Chinese market. The company also operates Kaola that sells imported maternity and baby products, skincare and cosmetics, and other general merchandise; and Yanxuan, which sells its private label products, including apparel, homeware, kitchenware, and other general merchandise. In addition, it operates NetEase News App and NetEase Websites, which provide Internet users with Chinese language-based online services that are centered around content and interactive community. Further, the company provides online advertising services comprising banner advertising, channel sponsorships, direct email, interactive media-rich sites, sponsored special events, games, contests, and other activities. Additionally, it offers online services, such as NetEase CC, a live video streaming platform; NetEase Cloud Music, a music-streaming platform; NetEase Youdao Education, an online platform offering educational content and solutions; EaseRead, an online reading platform; and NetEase Pay, a payment platform, as well as email services to individuals and corporates. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Beijing, the People's Republic of China.

InterCloud Systems Company Profile

InterCloud Systems, Inc. provides networking orchestration and automation for software-defined networking (SDN) and network function virtualization environments to telecommunications service provider and corporate enterprise markets in the United States and internationally. It operates through two segments, Applications and Infrastructure and Professional Services. The Applications and Infrastructure segment provides applications and services, including SDN training, SDN software development and integration, and vertical network function validation; and cabling and other field installations, as well as designs, engineers, installs, and maintains various types of Wi-Fi and DAS networks to enterprise customers. The Professional Services segment engages in the design and deployment of SDN and software-defined wide area networking solutions for enterprise and carrier accounts. The company is based in Shrewsbury, New Jersey.

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