Critical Comparison: The9 (NASDAQ:NCTY) and Envestnet (NYSE:ENV)

The9 (NASDAQ:NCTY – Get Rating) and Envestnet (NYSE:ENV – Get Rating) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Institutional & Insider Ownership

2.8% of The9 shares are owned by institutional investors. 30.8% of The9 shares are owned by company insiders. Comparatively, 1.4% of Envestnet shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

The9 has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500. Comparatively, Envestnet has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Profitability

This table compares The9 and Envestnet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The9	N/A	N/A	N/A
Envestnet	-3.91%	6.59%	2.83%

Analyst Recommendations

This is a summary of current ratings and price targets for The9 and Envestnet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The9	0	0	0	0	N/A
Envestnet	0	4	5	0	2.56

Envestnet has a consensus price target of $65.78, indicating a potential downside of 3.14%. Given Envestnet’s higher probable upside, analysts plainly believe Envestnet is more favorable than The9.

Valuation and Earnings

This table compares The9 and Envestnet’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The9	$21.32 million	1.58	-$64.53 million	N/A	N/A
Envestnet	$1.19 billion	3.17	$13.30 million	($0.89)	-76.30

Envestnet has higher revenue and earnings than The9.

Summary

Envestnet beats The9 on 7 of the 11 factors compared between the two stocks.

About The9

(Get Rating)

The9 Ltd. is engaged in the operation of online games. It operates through Greater China and Other Areas geographical segments. The firm is transitioning to cryptocurrencies mining business. The company was founded by Jun Zhu on December 22, 1999 and is headquartered in Shanghai, China.

About Envestnet

(Get Rating)

Envestnet, Inc. engages in the provision of intelligent systems for wealth management and financial wellness. It operates through the following segments: Envestnet Wealth Solutions and Envestnet Data & Analytics. The Envestnet Wealth Solutions segment provides unified wealth management software and services to empower financial advisors and institutions. The Envestnet Data & Analytics segment provides data aggregation and data analytics platform powering dynamic, cloud-based innovation for digital financial services. The company was founded by Judson Taft Bergman, James Winfield Lumberg, William C. Crager, and Brandon Rockwell Thomas in 1999 and is headquartered in Chicago, IL.