Contrasting Sohu.com (NASDAQ:SOHU) and GigaMedia (NASDAQ:GIGM)

Sohu.com (NASDAQ:SOHUGet Free Report) and GigaMedia (NASDAQ:GIGMGet Free Report) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Risk and Volatility

Sohu.com has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, GigaMedia has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500.

Earnings and Valuation

This table compares Sohu.com and GigaMedia”s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sohu.com $584.33 million 0.61 $394.10 million $7.84 1.73
GigaMedia $3.47 million 4.59 -$1.55 million ($0.15) -9.60

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

Analyst Recommendations

This is a summary of recent ratings for Sohu.com and GigaMedia, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sohu.com 0 1 2 0 2.67
GigaMedia 1 0 0 0 1.00

Sohu.com presently has a consensus price target of $19.00, indicating a potential upside of 39.91%. Given Sohu.com’s stronger consensus rating and higher probable upside, research analysts clearly believe Sohu.com is more favorable than GigaMedia.

Profitability

This table compares Sohu.com and GigaMedia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sohu.com 35.19% 20.92% 14.76%
GigaMedia -50.86% -4.52% -4.24%

Insider & Institutional Ownership

33.0% of Sohu.com shares are owned by institutional investors. Comparatively, 13.5% of GigaMedia shares are owned by institutional investors. 21.1% of Sohu.com shares are owned by company insiders. Comparatively, 1.0% of GigaMedia shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Sohu.com beats GigaMedia on 12 of the 14 factors compared between the two stocks.

About Sohu.com

(Get Free Report)

Sohu.com Limited engages in the provision of online media, video, and game products and services on personal computers (PCs) and mobile devices in China. It operates through two segments: Sohu and Changyou. The company offers online news, information, and content services through the mobile phone application Sohu News APP, mobile portal m.sohu.com, and www.sohu.com for PCs; and online video content and services through mobile phone application Sohu Video APP and tv.sohu.com, as well as ifox, a video application for PC. It also operates Focus (www.focus.cn), which provides online real estate information and services; and 17173.com website, which provides news, electronic forums, online videos, and other online game information services to game players, as well as offers mobile game distribution services. In addition, the company offers interactive online games for PCs and mobile devices. Further, it provides paid subscription and interactive broadcasting services. The company was incorporated in 1996 and is headquartered in Beijing, China.

About GigaMedia

(Get Free Report)

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.

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