The9 (NASDAQ:NCTY) and Dropbox (NASDAQ:DBX) Critical Comparison

The9 (NASDAQ:NCTY) and Dropbox (NASDAQ:DBX) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for The9 and Dropbox, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The9	1	0	0	0	1.00
Dropbox	3	5	1	0	1.78

Dropbox has a consensus price target of $31.60, indicating a potential downside of 10.60%. Given Dropbox’s stronger consensus rating and higher probable upside, analysts plainly believe Dropbox is more favorable than The9.

Risk & Volatility

The9 has a beta of 2.02, meaning that its stock price is 102% more volatile than the S&P 500. Comparatively, Dropbox has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Valuation & Earnings

This table compares The9 and Dropbox”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The9	$63.51 million	0.64	-$57.55 million	$6.00	0.45
Dropbox	$2.52 billion	3.16	$508.40 million	$1.80	19.64

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

Profitability

This table compares The9 and Dropbox’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
Dropbox	17.49%	-24.26%	15.88%

Insider & Institutional Ownership

0.5% of The9 shares are owned by institutional investors. Comparatively, 94.8% of Dropbox shares are owned by institutional investors. 30.8% of The9 shares are owned by insiders. Comparatively, 35.5% of Dropbox shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Dropbox beats The9 on 11 of the 14 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 Dropbox

Dropbox, Inc. provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.