Financial Analysis: Gravity (NASDAQ:GRVY) versus Autohome (NYSE:ATHM)

Autohome (NYSE:ATHM) and Gravity (NASDAQ:GRVY) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Profitability

This table compares Autohome and Gravity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Autohome	23.02%	7.79%	6.09%
Gravity	14.98%	34.76%	28.79%

Analyst Ratings

This is a breakdown of current ratings and price targets for Autohome and Gravity, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Autohome	0	4	1	1	2.50
Gravity	0	0	0	0	0.00

Autohome presently has a consensus target price of $32.00, suggesting a potential upside of 23.67%. Given Autohome’s stronger consensus rating and higher possible upside, analysts plainly believe Autohome is more favorable than Gravity.

Risk & Volatility

Autohome has a beta of 0.16, meaning that its stock price is 84% less volatile than the S&P 500. Comparatively, Gravity has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.

Earnings and Valuation

This table compares Autohome and Gravity”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Autohome	$7.04 billion	0.45	$230.31 million	$1.85	13.99
Gravity	$516.65 billion	0.00	$105.61 million	$8.98	6.50

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

Insider and Institutional Ownership

63.1% of Autohome shares are held by institutional investors. Comparatively, 9.9% of Gravity shares are held by institutional investors. 5.7% of Autohome shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Autohome beats Gravity on 10 of the 15 factors compared between the two stocks.

About Autohome

Autohome Inc. operates as an online destination for automobile consumers in the People’s Republic of China. The company delivers interactive content and tools to automobile consumers through its three websites, autohome.com.cn, che168.com, and ttpai.cn on PCs, mobile devices, mobile applications, and mini apps. It provides media services, including automaker advertising services and regional marketing campaigns; and leads generation services comprising dealer subscription services, advertising services for individual dealers, and used automobile listing and other platform-based services. The company offers Autohome Mall, an online transaction platform; and online bidding platform for used automobiles, as well as collects commissions for facilitating transactions of auto-financing and insurance products on its platform. The company was formerly known as Sequel Limited and changed its name to Autohome Inc. in October 2011. Autohome Inc. was incorporated in 2008 and is headquartered in Beijing, the People’s Republic of China.

About Gravity

Gravity Co., Ltd. develops and publishes online and mobile games worldwide. It offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Landverse. Its mobile games portfolio includes Ragnarok M; Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; Ragnarok Arena; WITH ISLAND; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; Generation Zombie; Ragnarok Idle Adventure; Ragnarok 20 Heroes; White Chord; WITH: Whale In The High; Ragnarok Lost Memories; and Paladog Tactics. It also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; Pigromance for Steam, Stove, Nintendo Switch, Xbox One, Xbox Series X|S; ALTF4 11 for Steam and Stove; Wetory for Steam, Stove, Nintedo Switch; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin, and Kongsuni; and markets dolls, stationery, food, and other character based merchandises, as well as game manuals, monthly magazines, and other publications; PC games, including Puzzle Platformer, ALTF42, Ragnarok ZERO, KAMiBAKO-Mythology of Cube, Psychodemic, and FINAL KNIGHT; social network games and mobile games, such as Ragnarok V: Returns, Ragnarok: The Lost Memories and Ragnrok Begins in-house; and web-browser-based games, such as Ragnarok Prequel and Ragnarok Prequel II. Further, the company provides system development and maintenance services, as well as system integration services to third parties. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.