Comparing Momo (NASDAQ:MOMO) & Cheetah Mobile (CMCM)

Cheetah Mobile (NYSE: CMCM) and Momo (NASDAQ:MOMO) are both mid-cap technology companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Cheetah Mobile 7.44% 10.76% 6.35%
Momo 25.88% 39.60% 32.36%

Analyst Ratings

This is a breakdown of current ratings for Cheetah Mobile and Momo, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cheetah Mobile 0 3 0 0 2.00
Momo 0 1 9 0 2.90

Cheetah Mobile presently has a consensus price target of $11.67, suggesting a potential downside of 25.55%. Momo has a consensus price target of $42.20, suggesting a potential upside of 59.43%. Given Momo’s stronger consensus rating and higher probable upside, analysts plainly believe Momo is more favorable than Cheetah Mobile.

Insider and Institutional Ownership

7.2% of Cheetah Mobile shares are held by institutional investors. Comparatively, 39.8% of Momo shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cheetah Mobile $657.45 million 3.42 -$11.59 million $0.39 40.18
Momo $553.10 million 9.50 $145.25 million $1.47 18.01

Momo has lower revenue, but higher earnings than Cheetah Mobile. Momo is trading at a lower price-to-earnings ratio than Cheetah Mobile, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Cheetah Mobile has a beta of 3.23, meaning that its share price is 223% more volatile than the S&P 500. Comparatively, Momo has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500.

Summary

Momo beats Cheetah Mobile on 10 of the 13 factors compared between the two stocks.

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.

Momo Company Profile

Momo Inc. is a holding company. The Company operates Momo, a mobile-based social networking platform. The Company’s Momo platform includes its Momo mobile application and a range of related features, functionalities, tools and services that it provides to users, customers and platform partners. Momo users can maintain their relationships through its private and group communication tools, content creation and sharing functions, as well as the offline social activities promoted on its platform. It also offers live music and entertainment broadcasts on its Momo platform. The Momo mobile application, which is available on android, iPhone operating system (iOS) and Windows platforms, enables users to establish social relationships based on locations and interests. Momo offers a personal way for users to discover people nearby, and the Company facilitates the connecting, communicating, interacting, and content sharing with others.

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