Sohu.com (NASDAQ: SOHU) and Shanda Games Limited (NASDAQ:GAME) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitabiliy, analyst recommendations and dividends.

Insider & Institutional Ownership

63.0% of Sohu.com shares are owned by institutional investors. 21.0% of Sohu.com shares are owned by 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 current recommendations and price targets for Sohu.com and Shanda Games Limited, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sohu.com 1 4 1 0 2.00
Shanda Games Limited 0 0 0 0 N/A

Sohu.com currently has a consensus target price of $50.10, suggesting a potential upside of 12.69%. Given Sohu.com’s higher probable upside, equities analysts clearly believe Sohu.com is more favorable than Shanda Games Limited.

Valuation & Earnings

This table compares Sohu.com and Shanda Games Limited’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sohu.com $1.62 billion 1.07 $34.28 million ($7.06) -6.30
Shanda Games Limited N/A N/A N/A N/A N/A

Sohu.com has higher revenue and earnings than Shanda Games Limited.

Profitability

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

Net Margins Return on Equity Return on Assets
Sohu.com -16.83% -17.02% -10.43%
Shanda Games Limited 18.49% 32.56% 15.63%

Summary

Sohu.com beats Shanda Games Limited on 5 of the 8 factors compared between the two stocks.

Sohu.com Company Profile

Sohu.com Inc. (Sohu) is an online media, search and game service company, which is engaged in providing online products and services on personal computers (PCs) and mobile devices in the People’s Republic of China (the PRC). The Company operates through three segments: the Sohu segment; the Sogou segment, and the Changyou segment. The Sohu segment’s business is the brand advertising business, which offers to users, over its matrices of Chinese language online media, various content, products and services across multiple Internet-enabled devices, such as PCs, mobile phones and tablets. The search and search-related business primarily offers advertisers pay-for-click services, as well as online marketing services on Web directories operated by Sogou. Changyou’s business lines consist of the online game business; the platform channel business, which consists primarily of online advertising and also includes Internet value-added services (IVAS), and the cinema advertising business.

Shanda Games Limited Company Profile

Shanda Games Limited (Shanda Games) is engaged in the development, operation, and publishing of online games, including both multi-player online role-playing games (MMORPGs or MMO games) and mobile games, as well as related businesses, principally in the People’s Republic of China (the PRC) and also in various other countries. The Company develops and sources an array of game content through multiple channels, including in-house development, licensing, investment, acquisition, joint development and joint operation. Through these channels, it has built a diversified game portfolio and a robust game pipeline. It operates approximately 35 MMO games and approximately 29 mobile games in China and certain overseas markets. Its games include Mir II, BNB, Woool, The Age, Maple Story, Latale, Fengyun Online, A Thousand Years III, AION, Luvinia Online, Dragon Nest, Legend of Immortals, Mir III, Million Arthur, Chain Chronicle, LoveLive!, Iron Knights, Bloodline and Final Fantasy XIV.

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