GigaMedia (NASDAQ:GIGM – Get Free Report) and Netflix (NASDAQ:NFLX – Get Free Report) are both communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.
Insider and Institutional Ownership
13.5% of GigaMedia shares are held by institutional investors. Comparatively, 80.9% of Netflix shares are held by institutional investors. 1.0% of GigaMedia shares are held by insiders. Comparatively, 1.2% of Netflix shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares GigaMedia and Netflix’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| GigaMedia | -43.36% | -5.36% | -5.02% |
| Netflix | 28.22% | 40.02% | 19.81% |
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| GigaMedia | $3.47 million | 4.39 | -$1.55 million | ($0.18) | -7.67 |
| Netflix | $45.18 billion | 6.62 | $10.98 billion | $3.18 | 22.58 |
Netflix has higher revenue and earnings than GigaMedia. GigaMedia is trading at a lower price-to-earnings ratio than Netflix, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
GigaMedia has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Netflix has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and target prices for GigaMedia and Netflix, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| GigaMedia | 1 | 0 | 0 | 0 | 1.00 |
| Netflix | 2 | 15 | 34 | 4 | 2.73 |
Netflix has a consensus price target of $95.99, indicating a potential upside of 33.70%. Given Netflix’s stronger consensus rating and higher possible upside, analysts clearly believe Netflix is more favorable than GigaMedia.
Summary
Netflix beats GigaMedia on 15 of the 15 factors compared between the two stocks.
About GigaMedia
GigaMedia Limited, together with its subsidiaries, provides digital entertainment services in Taiwan, Hong Kong, and Macau. The company owns and operates FunTown, a digital entertainment portal that offers mobile and browser-based casual games, as well as provides services such as player clubs, tournaments, avatars, friends and family messenger and online chatting systems, customer service, mobile platform, and customer platform. It also offers MahJong, a traditional Chinese tile-based game; casual card and table games; online card games; and chance-based games, including bingo, lotto, horse racing, Sic-Bo, slots, and other casual games. In addition, the company provides role-playing and sports games, such as Tales Runner, a multi-player online obstacle running game; Yume 100, a story-based game that targets female players; Akaseka, a female-oriented game; and Shinobi Master New Link, a male-oriented game. GigaMedia Limited was founded in 1998 and is headquartered in Taipei, Taiwan.
About Netflix
Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices. It has operations in approximately 190 countries. The company was incorporated in 1997 and is headquartered in Los Gatos, California.
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