Analyzing Bitauto (NYSE:BITA) and Sohu.com (SOHU)

Sohu.com (NASDAQ:SOHU) and Bitauto (NYSE:BITA) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Sohu.com and Bitauto, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sohu.com 0 0 0 0 N/A
Bitauto 0 3 2 0 2.40

Bitauto has a consensus target price of $24.80, suggesting a potential upside of 130.91%. Given Bitauto’s higher probable upside, analysts clearly believe Bitauto is more favorable than Sohu.com.

Institutional & Insider Ownership

55.1% of Sohu.com shares are owned by institutional investors. Comparatively, 27.9% of Bitauto shares are owned by institutional investors. 21.1% of Sohu.com shares are owned by insiders. Comparatively, 17.0% of Bitauto shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Sohu.com and Bitauto’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sohu.com -6.65% -8.07% -3.84%
Bitauto -5.67% -0.42% -0.14%

Volatility & Risk

Sohu.com has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, Bitauto has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Valuation and Earnings

This table compares Sohu.com and Bitauto’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sohu.com $1.88 billion 0.28 -$160.08 million ($4.13) -3.26
Bitauto $1.54 billion 0.51 -$87.68 million $1.40 7.67

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

Summary

Bitauto beats Sohu.com on 9 of the 13 factors compared between the two stocks.

About Sohu.com

Sohu.com Limited provides online media, search, and game services on personal computers (PCs) and mobile devices in the People's Republic of China. The company provides online news and information through a mobile phone application, Sohu News APP; sohu.com for PCs; and m.sohu.com mobile portal, as well as online video content and service through tv.sohu.com for PCs, as well as Sohu Video APP mobile phone application. It also operates focus.cn, which provides online real estate information and services; and offers paid subscription services, interactive broadcasting services, and content through various platforms. In addition, the company operates Sogou Search, which makes information accessible for Chinese Internet users; Sogou Input Method, a cloud-based Chinese language input software; Sogou Browser for Web navigation; Sogou Web Directory, a content aggregation and distribution platform; and Sogou Translation to deliver language translation, as well as offers auction-based pay-for-click services for advertisers. Further, it offers Internet value-added services, including the operation of Web and mobile games developed by third parties; online reading services and smart hardware products; online games; and cinema advertising services. Additionally, the company operates 17173.com Website, a game information portal; and RaidCall, which provides online music and entertainment services. Sohu.com Inc. was founded in 1996 and is headquartered in Beijing, the People's Republic of China.

About Bitauto

Bitauto Holdings Limited, through its subsidiaries, provides Internet content and marketing services, and transaction services for the automobile industry in the People's Republic of China. It operates in three segments: Advertising and Subscription Business, Transaction Services Business, and Digital Marketing Solutions Business. The Advertising and Subscription Business segment offers advertising services, including automobile pricing and promotional information, specifications, reviews, and consumer feedback to automakers through its bitauto.com Website and related mobile applications. It also provides transaction-focused online advertisement and promotional services for automakers, automobile dealers, auto finance partners, and insurance companies; and Web-based and mobile-based integrated digital marketing solutions to automobile dealers. The Transaction Services Business segment operates an online automobile retail transaction platform, which provides transaction platform and self-operated financing services. The Digital Marketing Solutions Business segment offers one-stop digital marketing solutions, including Website creation and maintenance, online public relation, online marketing campaign, advertising agency, big data application, and digital image creation services for automakers. The company also distributes its dealer customers' automobile pricing and promotional information through its Internet service provider partners. Bitauto Holdings Limited was founded in 2000 and is headquartered in Beijing, the People's Republic of China.

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