Head to Head Review: Spotify Technology (NYSE:SPOT) & NEXON (OTCMKTS:NEXOY)

NEXON (OTCMKTS:NEXOY) and Spotify Technology (NYSE:SPOT) are both large-cap communication services companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Institutional and Insider Ownership

84.1% of Spotify Technology shares are owned by institutional investors. 0.4% of Spotify Technology shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for NEXON and Spotify Technology, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NEXON	0	2	2	0	2.50
Spotify Technology	0	6	17	1	2.79

Spotify Technology has a consensus target price of $594.50, indicating a potential upside of 14.78%. Given Spotify Technology’s stronger consensus rating and higher possible upside, analysts plainly believe Spotify Technology is more favorable than NEXON.

Earnings & Valuation

This table compares NEXON and Spotify Technology”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NEXON	$3.18 billion	5.03	$616.75 million	C$1.11	18.47
Spotify Technology	$19.44 billion	5.49	$2.50 billion	$16.06	32.25

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

Profitability

This table compares NEXON and Spotify Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NEXON	26.37%	12.45%	9.72%
Spotify Technology	18.44%	41.39%	23.78%

Summary

Spotify Technology beats NEXON on 13 of the 14 factors compared between the two stocks.

About NEXON

NEXON Co., Ltd. produces, develops, and services PC online and mobile games. It operates through five segments: Japan, Korea, China, North America, and Others. The company's PC online game titles include MapleStory, Dungeon & Fighter, and EA SPORTS FIFA ONLINE 4. The company was formerly known as NEXON Japan Co., Ltd. and changed its name to NEXON Co., Ltd. in April 2009. NEXON Co., Ltd. was founded in 1994 and is headquartered in Tokyo, Japan.

About Spotify Technology

Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. This segment sells directly to the end users. The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its users on their computers, tablets, and compatible mobile devices. The company also offers sales, distribution and marketing, contract research and development, and customer and other support services. Spotify Technology S.A. was incorporated in 2006 and is based in Luxembourg City, Luxembourg.