Comparing The9 (NASDAQ:NCTY) & Sprout Social (NASDAQ:SPT)

The9 (NASDAQ:NCTY) and Sprout Social (NASDAQ:SPT) are both small-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.

Risk & Volatility

The9 has a beta of 2.09, meaning that its share price is 109% more volatile than the S&P 500. Comparatively, Sprout Social has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Profitability

This table compares The9 and Sprout Social’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
Sprout Social	-6.13%	-8.80%	-3.64%

Earnings & Valuation

This table compares The9 and Sprout Social”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The9	$15.43 million	3.61	-$57.55 million	$6.00	0.61
Sprout Social	$481.82 million	1.25	-$43.33 million	($0.50)	-19.90

Sprout Social has higher revenue and earnings than The9. Sprout Social is trading at a lower price-to-earnings ratio than The9, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for The9 and Sprout Social, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The9	1	0	0	0	1.00
Sprout Social	2	3	3	1	2.33

Sprout Social has a consensus price target of $10.43, indicating a potential upside of 4.81%. Given Sprout Social’s stronger consensus rating and higher possible upside, analysts clearly believe Sprout Social is more favorable than The9.

Institutional and Insider Ownership

0.5% of The9 shares are held by institutional investors. 30.8% of The9 shares are held by company insiders. Comparatively, 9.6% of Sprout Social 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

The9 beats Sprout Social on 9 of the 15 factors compared between the two stocks.

About The9

The9 Limited operates as a cryptocurrency mining business in China, Eastern Europe, Asia, and North America. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was incorporated in 1999 and is headquartered in Shanghai, the People’s Republic of China.

About Sprout Social

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides cloud software for social messaging, data and workflows in a unified system of record, intelligence, and action. It offers integrated tools, such as social engagement/response; publishing; reporting and analytics; social listening and business intelligence; reputation management; social commerce; employee advocacy; and automation and workflows. In addition, the company provides smart inbox, social customer relationship management, social monitoring and alerts, customer service tools, and automation; and centralized content planning, creation, and publishing, automated scheduling, content performance reporting, suggested content, message approval workflows, publishing permissions and governance, and content and asset libraries. Further, it offers social media; content performance, customer service and team, custom report builder, and reporting API; and market research, brand health, competitive insights, consumer trends, and product feedback; and social commerce, reputation management, employee advocacy, mobile applications, and chat bot creation and management. Additionally, the company offers professional services consisting of consulting and training services. It serves social and community management; public relations; marketing; influencer marketing; customer service and care; commerce, sales and customer acquisition; recruiting and hiring, product development, and business strategy; and small-and-medium-sized businesses, mid-market companies, enterprises, marketing agencies, government, non-profit, and educational institutions. Sprout Social, Inc. was incorporated in 2010 and is headquartered in Chicago, Illinois.