Critical Analysis: Taomee (TAOM) & The Competition

Taomee (NYSE: TAOM) is one of 25 public companies in the “Entertainment Production” industry, but how does it weigh in compared to its competitors? We will compare Taomee to similar businesses based on the strength of its analyst recommendations, profitability, institutional ownership, valuation, earnings, dividends and risk.

Valuation and Earnings

This table compares Taomee and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Taomee N/A N/A -41.11
Taomee Competitors $9.52 billion $1.09 billion 1,227.19

Taomee’s competitors have higher revenue and earnings than Taomee. Taomee is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Taomee and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Taomee 2.06% -0.90% 0.75%
Taomee Competitors 2.31% 10.26% 3.39%

Institutional & Insider Ownership

46.6% of shares of all “Entertainment Production” companies are held by institutional investors. 27.0% of shares of all “Entertainment Production” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

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, Taomee’s competitors have a beta of 0.88, suggesting that their average stock price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Taomee and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Taomee 0 0 0 0 N/A
Taomee Competitors 112 502 1260 25 2.63

As a group, “Entertainment Production” companies have a potential upside of 5.93%. Given Taomee’s competitors higher probable upside, analysts clearly believe Taomee has less favorable growth aspects than its competitors.

Summary

Taomee competitors beat Taomee on 8 of the 8 factors compared.

About Taomee

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.

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