Critical Contrast: Adobe (NASDAQ:ADBE) & The9 (NASDAQ:NCTY)

Adobe (NASDAQ:ADBE) and The9 (NASDAQ:NCTY) are both technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.

Earnings and Valuation

This table compares Adobe and The9″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adobe	$23.77 billion	3.96	$7.13 billion	$17.92	13.20
The9	$15.43 million	3.47	-$57.55 million	$6.00	0.59

Adobe has higher revenue and earnings than The9. The9 is trading at a lower price-to-earnings ratio than Adobe, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Adobe has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500. Comparatively, The9 has a beta of 2.09, suggesting that its share price is 109% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Adobe and The9, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adobe	5	21	7	0	2.06
The9	1	0	0	0	1.00

Adobe presently has a consensus price target of $282.68, suggesting a potential upside of 19.50%. Given Adobe’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Adobe is more favorable than The9.

Profitability

This table compares Adobe and The9’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adobe	28.05%	65.65%	25.54%
The9	N/A	N/A	N/A

Institutional and Insider Ownership

81.8% of Adobe shares are held by institutional investors. Comparatively, 0.5% of The9 shares are held by institutional investors. 0.2% of Adobe shares are held by insiders. Comparatively, 30.8% of The9 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.

Summary

Adobe beats The9 on 12 of the 14 factors compared between the two stocks.

About Adobe

Adobe Inc., together with its subsidiaries, operates as a diversified software company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content; and Document Cloud, a unified cloud-based document services platform. Its flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, students, workers, marketers, educators, enthusiasts, and communicators. The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite. The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as Advertising Cloud offerings. It also provides consulting, technical support, and learning services. The company offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website at adobe.com. It also distributes products and services through distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and original equipment manufacturers. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California.

About The9

The9 Limited operates as a cryptocurrency mining business in China, Eastern Europe, Asia, and North America. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was incorporated in 1999 and is headquartered in Shanghai, the People’s Republic of China.