Cheetah Mobile (NYSE: CMCM) and Sito Mobile (NASDAQ:SITO) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, dividends, profitability, risk and valuation.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cheetah Mobile $657.45 million 2.42 -$11.59 million $0.36 30.72
Sito Mobile $29.43 million 4.96 -$1.40 million ($0.51) -12.98

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

Profitability

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

Net Margins Return on Equity Return on Assets
Cheetah Mobile 7.44% 10.76% 6.35%
Sito Mobile -29.34% -47.82% -25.15%

Risk and Volatility

Cheetah Mobile has a beta of 3.24, suggesting that its stock price is 224% more volatile than the S&P 500. Comparatively, Sito Mobile has a beta of -1.24, suggesting that its stock price is 224% less volatile than the S&P 500.

Institutional & Insider Ownership

7.2% of Cheetah Mobile shares are held by institutional investors. Comparatively, 12.5% of Sito Mobile shares are held by institutional investors. 1.5% of Sito Mobile shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cheetah Mobile 0 3 0 0 2.00
Sito Mobile 0 1 5 0 2.83

Cheetah Mobile currently has a consensus target price of $11.67, indicating a potential upside of 5.49%. Sito Mobile has a consensus target price of $8.80, indicating a potential upside of 32.93%. Given Sito Mobile’s stronger consensus rating and higher possible upside, analysts clearly believe Sito Mobile is more favorable than Cheetah Mobile.

Summary

Sito Mobile beats Cheetah Mobile on 7 of the 13 factors compared between the two stocks.

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.

About Sito Mobile

SITO Mobile, Ltd. operates a mobile location-based advertising platform serving businesses, advertisers and brands. The Company’s offerings include SITO Location-Based Advertising and SITO Mobile Messaging. SITO Location-Based Advertising delivers display advertisements and videos on behalf of advertisers, including various features, such as Geo-fencing, Verified walk-in, Behavioral Targeting, and Analytics and Optimization. Geo-fencing targets customers within a certain radius of location and uses technology to push coupons, advertisements and promotions to mobile applications. Verified Walk-in tracks foot-traffic to locations and which advertisements drive action. Behavioral Targeting tracks past behaviors over 30 to 90 day increments allowing for real-time campaign management. Analytics and Optimization is a culling and building measurement system. SITO Mobile Messaging is a platform for building and controlling programs, including messaging and customer incentive programs.

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