Momo (NASDAQ: MOMO) and Cheetah Mobile (NASDAQ:CMCM) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Profitability

This table compares Momo and Cheetah Mobile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Momo 27.00% 38.94% 32.00%
Cheetah Mobile 6.11% 8.91% 5.22%

Institutional and Insider Ownership

39.1% of Momo shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Momo and Cheetah Mobile, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Momo 0 1 13 0 2.93
Cheetah Mobile 0 3 0 0 2.00

Momo presently has a consensus target price of $41.79, indicating a potential upside of 29.45%. Cheetah Mobile has a consensus target price of $11.17, indicating a potential upside of 29.69%. Given Cheetah Mobile’s higher possible upside, analysts plainly believe Cheetah Mobile is more favorable than Momo.

Earnings & Valuation

This table compares Momo and Cheetah Mobile’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Momo N/A N/A N/A $1.29 25.02
Cheetah Mobile $734.20 million 1.63 $44.89 million N/A N/A

Cheetah Mobile has higher revenue and earnings than Momo.

Summary

Momo beats Cheetah Mobile on 6 of the 9 factors compared between the two stocks.

About Momo

Momo Inc. is a holding company. The Company operates Momo, a mobile-based social networking platform. The Company’s Momo platform includes its Momo mobile application and a range of related features, functionalities, tools and services that it provides to users, customers and platform partners. Momo users can maintain their relationships through its private and group communication tools, content creation and sharing functions, as well as the offline social activities promoted on its platform. It also offers live music and entertainment broadcasts on its Momo platform. The Momo mobile application, which is available on android, iPhone operating system (iOS) and Windows platforms, enables users to establish social relationships based on locations and interests. Momo offers a personal way for users to discover people nearby, and the Company facilitates the connecting, communicating, interacting, and content sharing with others.

About Cheetah Mobile

Cheetah Mobile Inc. is a holding company. The Company and its consolidated subsidiaries, variable interest entities (VIEs) and a VIE’s subsidiary are engaged in the provision of online marketing services, Internet value-added services, and Internet security services and others. The Company operates a platform that offers mobile and personal computer (PC) applications for its users and global content promotional channels for its customers, both of which are powered by its cloud-based data analytics engines. For its users, its diversified suite of applications optimizes mobile and PC Internet system performance, and provides real time protection against known and unknown security threats. Its data analytics engines perform real time analysis of mobile applications, program files and Websites on their devices for behavior that may impair system performance or impose security risks.

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