Datasea (NASDAQ:DTSS – Get Free Report) and Grid Dynamics (NASDAQ:GDYN – Get Free Report) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.
Profitability
This table compares Datasea and Grid Dynamics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Datasea | -4.80% | -88.98% | -37.33% |
| Grid Dynamics | 2.35% | 1.46% | 1.28% |
Earnings and Valuation
This table compares Datasea and Grid Dynamics”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Datasea | $71.62 million | 0.13 | -$5.09 million | ($0.32) | -2.81 |
| Grid Dynamics | $411.83 million | 1.17 | $9.67 million | $0.10 | 56.40 |
Grid Dynamics has higher revenue and earnings than Datasea. Datasea is trading at a lower price-to-earnings ratio than Grid Dynamics, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Datasea has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Grid Dynamics has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings for Datasea and Grid Dynamics, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Datasea | 1 | 0 | 0 | 0 | 1.00 |
| Grid Dynamics | 1 | 1 | 5 | 0 | 2.57 |
Grid Dynamics has a consensus target price of $10.60, indicating a potential upside of 87.94%. Given Grid Dynamics’ stronger consensus rating and higher probable upside, analysts plainly believe Grid Dynamics is more favorable than Datasea.
Insider and Institutional Ownership
82.1% of Datasea shares are owned by institutional investors. Comparatively, 71.2% of Grid Dynamics shares are owned by institutional investors. 50.7% of Datasea shares are owned by insiders. Comparatively, 6.5% of Grid Dynamics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
Grid Dynamics beats Datasea on 12 of the 14 factors compared between the two stocks.
About Datasea
Datasea Inc., through its subsidiaries, provides technology and information systems in the People's Republic of China. The company provides smart city solutions and 5G messaging applications. It also offers its smart security solutions primarily to schools, tourist or scenic attractions, and public communities. In addition, the company provides intelligent acoustics products, which include ultrasonic air sterilizer, air purification and deodorization, and other products. The company was formerly known as Rose Rock, Inc. and changed its name to Datasea Inc. in October 2015. Datasea Inc. was incorporated in 2014 and is headquartered in Beijing, the People's Republic of China.
About Grid Dynamics
Grid Dynamics Holdings, Inc., together with its subsidiaries, provides technology consulting, platform and product engineering, and analytics services in North America, Europe, and internationally. It offers cloud platform and product engineering services, such as architecting, designing, and building scalable and secure cloud-based platforms and business applications; and AI/machine learning and data platform engineering services that build platforms to facilitate batch and streaming data ingestion, quality governance, orchestration, semantic modeling, observability, and analysis at scale. The company provides digital engagement services, including digital ecosystem design and implementation; and supply chain, Internet of Thing, and advanced manufacturing, which focuses on transforming traditional operations into smart and connected ecosystems. It serves customers that operate in the tech, media, telecommunications, retail, consumer packaged goods, manufacturing, and finance industries. The company was formerly known as ChaSerg Technology Acquisition Corp. and changed its name to Grid Dynamics Holdings, Inc. Grid Dynamics Holdings, Inc. was founded in 2006 and is headquartered in San Ramon, California.
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