International Business Machines (NYSE:IBM) & VNET Group (NASDAQ:VNET) Critical Comparison

VNET Group (NASDAQ:VNET) and International Business Machines (NYSE:IBM) are both technology companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitability and institutional ownership.

Earnings & Valuation

This table compares VNET Group and International Business Machines”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VNET Group	$1.42 billion	0.74	-$36.01 million	($1.42)	-2.73
International Business Machines	$67.53 billion	3.30	$10.59 billion	$11.27	20.97

International Business Machines has higher revenue and earnings than VNET Group. VNET Group is trading at a lower price-to-earnings ratio than International Business Machines, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

VNET Group has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500. Comparatively, International Business Machines has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Profitability

This table compares VNET Group and International Business Machines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VNET Group	-22.29%	-36.25%	-4.43%
International Business Machines	15.52%	35.65%	7.54%

Insider and Institutional Ownership

72.8% of VNET Group shares are owned by institutional investors. Comparatively, 59.0% of International Business Machines shares are owned by institutional investors. 12.1% of VNET Group shares are owned by insiders. Comparatively, 0.3% of International Business Machines shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for VNET Group and International Business Machines, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VNET Group	1	1	4	0	2.50
International Business Machines	2	12	20	0	2.53

VNET Group currently has a consensus price target of $16.90, suggesting a potential upside of 335.50%. International Business Machines has a consensus price target of $255.76, suggesting a potential upside of 8.21%. Given VNET Group’s higher possible upside, equities research analysts plainly believe VNET Group is more favorable than International Business Machines.

Summary

International Business Machines beats VNET Group on 11 of the 14 factors compared between the two stocks.

About VNET Group

VNET Group, Inc., an investment holding company, provides hosting and related services in China. It offers managed hosting services consisting of managed retail services, such as colocation services that dedicate data center space to house customers' servers and networking equipment, as well as allow customers to lease partial or entire cabinets for their servers; interconnectivity services that allow customers to connect their servers; value-added services, including hybrid IT, bare metal, firewall, server load balancing, data backup and recovery, data center management, server management, and backup server services; cloud services that allow customers to run applications over the internet using IT infrastructure; and VPN Services that extend customers' private networks by setting up connections through the public internet. The company also provides server administration services, such as operating system support and assistance with updates, server monitoring, server backup and restoration, server security evaluation, firewall services, and disaster recovery services. It serves information technology and cloud services, communications and social networking, gaming and entertainment, e-commerce, automobile, financial services, and blue-chip and small-to-mid-sized enterprises; government agencies; individuals; and telecommunication carriers. The company was formerly known as 21Vianet Group, Inc. and changed its name to VNET Group, Inc. in October 2021. VNET Group, Inc. was founded in 1999 and is headquartered in Beijing, the People's Republic of China.

About International Business Machines

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.