YY (YY) and Leaf Group (LFGR) Critical Analysis

YY (NASDAQ: YY) and Leaf Group (NASDAQ:LFGR) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for YY and Leaf Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
YY 1 5 9 0 2.53
Leaf Group 0 1 4 0 2.80

YY presently has a consensus price target of $72.71, suggesting a potential downside of 20.16%. Leaf Group has a consensus price target of $10.30, suggesting a potential upside of 43.06%. Given Leaf Group’s stronger consensus rating and higher probable upside, analysts plainly believe Leaf Group is more favorable than YY.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
YY $1.45 billion N/A $374.14 million $5.24 17.38
Leaf Group $117.85 million 1.25 -$21.14 million N/A N/A

YY has higher revenue and earnings than Leaf Group.

Profitability

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

Net Margins Return on Equity Return on Assets
YY 22.08% 39.07% 22.15%
Leaf Group -31.38% -52.73% -41.29%

Institutional and Insider Ownership

55.1% of YY shares are held by institutional investors. 43.0% of YY shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

YY beats Leaf Group on 8 of the 10 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 Leaf Group

Leaf Group Ltd., formerly Demand Media, Inc., is diversified Internet marketplaces and media company. The Company has online media properties and marketplace platforms that enable communities of creators to reach audiences in lifestyle categories. The Company operates an online studio platform for the professional creation and distribution of content, as well as two online artist marketplaces. Its business comprises two service offerings: Content & Media and Marketplaces. The Company creates media content, including text articles, videos, photographs and designed visual formats, and publishes such content to its owned and operated online properties and to its customers’ online properties. The Company also offers its content creation and distribution platform to provide custom content and other content marketing solutions to brands, publishers and advertisers.

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