Reviewing SEA (SE) & Cheetah Mobile (CMCM)

SEA (NYSE: SE) and Cheetah Mobile (NYSE:CMCM) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Valuation and Earnings

This table compares SEA and Cheetah Mobile’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SEA N/A N/A N/A N/A N/A
Cheetah Mobile $657.45 million 2.43 -$11.59 million $0.36 30.92

SEA has higher earnings, but lower revenue than Cheetah Mobile.

Analyst Ratings

This is a summary of current ratings and price targets for SEA and Cheetah Mobile, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SEA 0 0 6 0 3.00
Cheetah Mobile 0 3 0 0 2.00

SEA presently has a consensus target price of $18.67, suggesting a potential upside of 56.60%. Cheetah Mobile has a consensus target price of $11.67, suggesting a potential upside of 4.82%. Given SEA’s stronger consensus rating and higher possible upside, analysts plainly believe SEA is more favorable than Cheetah Mobile.

Profitability

This table compares SEA and Cheetah Mobile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SEA -141.10% N/A -48.73%
Cheetah Mobile 7.44% 10.76% 6.35%

Insider and Institutional Ownership

68.7% of SEA shares are held by institutional investors. Comparatively, 7.2% of Cheetah Mobile shares are held by institutional investors. 0.2% of SEA shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

SEA beats Cheetah Mobile on 5 of the 9 factors compared between the two stocks.

SEA Company Profile

Sea Limited, formerly Garena Interactive Holding Limited, is an Internet company. The Company operates through three segments: digital entertainment, e-commerce and digital financial services. The Company has developed an integrated platform consisting of digital entertainment focused on online games, e-commerce, and digital financial services focused on e-wallet services. Its platforms include Garena, Shopee, and AirPay. Garena provides access to engaging mobile and personal computer (PC) online games, live streaming game play, as well as social features such as user chat and online forums. Shopee is an e-commerce marketplace where users come together to browse, shop and sell on-the-go, anytime, anywhere. AirPay App is the Company’s digital financial services business that provides e-wallet services to consumers through the AirPay App and to small businesses through the AirPay counter application.

Cheetah Mobile Company Profile

Cheetah Mobile Inc. is a holding company. The Company and its consolidated subsidiaries, variable interest entities (VIEs) and a VIE’s subsidiary are engaged in the provision of online marketing services, Internet value-added services, and Internet security services and others. The Company operates a platform that offers mobile and personal computer (PC) applications for its users and global content promotional channels for its customers, both of which are powered by its cloud-based data analytics engines. For its users, its diversified suite of applications optimizes mobile and PC Internet system performance, and provides real time protection against known and unknown security threats. Its data analytics engines perform real time analysis of mobile applications, program files and Websites on their devices for behavior that may impair system performance or impose security risks.

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