Comparing Eros International (EROS) & Taomee (TAOM)

Taomee (NYSE: TAOM) and Eros International (NYSE:EROS) are both small-cap cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Institutional & Insider Ownership

60.5% of Eros International shares are held by institutional investors. 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.

Valuation & Earnings

This table compares Taomee and Eros International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Taomee N/A N/A N/A ($0.09) -41.11
Eros International $252.99 million 1.97 $3.80 million $0.04 241.31

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

Risk and Volatility

Taomee has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Eros International has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Profitability

This table compares Taomee and Eros International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Taomee 2.06% -0.90% 0.75%
Eros International 0.96% 0.22% 0.15%

Analyst Recommendations

This is a summary of recent ratings and price targets for Taomee and Eros International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Taomee 0 0 0 0 N/A
Eros International 0 0 2 0 3.00

Eros International has a consensus target price of $17.00, suggesting a potential upside of 76.17%. Given Eros International’s higher probable upside, analysts clearly believe Eros International is more favorable than Taomee.

Summary

Eros International beats Taomee on 7 of the 10 factors compared between the two stocks.

Taomee Company Profile

Taomee Holdings Limited is a children’s entertainment and media company in China. The Company is engaged in developing branded entertainment experiences across online and mobile platforms. It has developed branded entertainment franchises, including its major franchises of Mole’s World, Seer and Flower Angel. In addition, the Company also operates the franchise of Canimals in China. The Company’s brands and franchises have expanded into various online and offline platforms, including the virtual worlds, video streaming site, mobile games and applications, social networking, films and cartoon animations, merchandising and toys. The Company provides a portfolio of services and products through two business segments: online business and offline business.

Eros International Company Profile

Eros International Plc (Eros) is a holding company, which serves the Indian film entertainment industry. The Company’s principal activities include the acquisition, co-production and distribution of Indian films and related content. It distributes its film content through the distribution channels, such as theatrical, including multiplex chains and standalone theaters; television syndication, including satellite television broadcasting, cable television and terrestrial television; digital and ancillary, including music, inflight entertainment, home video, Internet protocol television (IPTV), video on demand (VOD), and Internet channels and Eros Now. As of March 31, 2016, its distribution network extends to over 50 countries, such as the United States, the United Kingdom, the Middle East, Germany, Poland, Russia, Romania, Indonesia and Arabic speaking countries. It conducts global operations through its Indian and international subsidiaries, including Eros International Media Limited.

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