Contrasting Cheetah Mobile (CMCM) and Momo (MOMO)

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations 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 10 0 2.91

Cheetah Mobile currently has a consensus target price of $11.67, suggesting a potential downside of 2.45%. Momo has a consensus target price of $43.55, suggesting a potential upside of 35.49%. Given Momo’s stronger consensus rating and higher probable upside, analysts plainly believe Momo is more favorable than Cheetah Mobile.

Risk & Volatility

Cheetah Mobile has a beta of 3.01, meaning that its share price is 201% more volatile than the S&P 500. Comparatively, Momo has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500.

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% 11.03% 6.50%
Momo 27.00% 38.94% 32.00%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Cheetah Mobile $657.45 million 2.61 -$11.59 million $0.36 33.22
Momo $553.10 million 11.30 $145.25 million $1.29 24.91

Momo has higher revenue, but lower 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.

Insider and Institutional Ownership

7.1% of Cheetah Mobile shares are held by institutional investors. Comparatively, 44.3% of Momo shares are held by institutional investors. 17.1% of Cheetah Mobile shares are held by company insiders. Comparatively, 61.4% of Momo shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Momo beats Cheetah Mobile on 11 of the 14 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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