Contrasting Autohome (NYSE:ATHM) & Rakuten (OTCMKTS:RKUNY)

Rakuten (OTCMKTS:RKUNY) and Autohome (NYSE:ATHM) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rakuten	$15.07 billion	0.92	-$1.07 billion	($0.65)	-9.85
Autohome	$964.42 million	3.15	$245.52 million	$1.70	15.29

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rakuten	-8.85%	-18.83%	-0.82%
Autohome	21.74%	7.10%	5.66%

Analyst Ratings

This is a breakdown of recent recommendations for Rakuten and Autohome, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rakuten	0	0	0	2	4.00
Autohome	0	2	1	0	2.33

Autohome has a consensus target price of $36.00, indicating a potential upside of 38.47%. Given Autohome’s higher possible upside, analysts plainly believe Autohome is more favorable than Rakuten.

Volatility and Risk

Rakuten has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, Autohome has a beta of 0.09, indicating that its share price is 91% less volatile than the S&P 500.

Institutional and Insider Ownership

63.1% of Autohome shares are owned by institutional investors. 5.7% of Autohome shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Autohome beats Rakuten on 11 of the 15 factors compared between the two stocks.

About Rakuten

Rakuten Group, Inc. provides services in e-commerce, fintech, digital content, and communications to various users in Japan and internationally. The company operates through three segments: Internet Services, FinTech, and Mobile. The Internet Services segment provides range of e-commerce sites, such as Rakuten Ichiba, an Internet shopping mall, online cash-back sites, travel booking sites, portal sites, and digital content sites. It also offers messaging services and sells advertising; and manages professional sport teams. The FinTech segment offers financial services over the internet related to banking and securities, credit cards, life insurance, general insurance, electronic payment business, crypto asset (virtual currency) spot transaction, etc. The Mobile segment provides communication services and technology, electricity supply, and digital content site services. The company was formerly known as Rakuten, Inc. and changed its name to Rakuten Group, Inc. in April 2021. Rakuten Group, Inc. was incorporated in 1997 and is headquartered in Setagaya, Japan.

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.