Perfect World Co. (NASDAQ: PWRD) and Sohu.com (NASDAQ:SOHU) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitabiliy, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Analyst Recommendations

This is a summary of current recommendations and price targets for Perfect World Co. and Sohu.com, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Perfect World Co. 0 0 0 0 N/A
Sohu.com 1 4 1 0 2.00

Sohu.com has a consensus price target of $50.10, indicating a potential upside of 10.60%. Given Sohu.com’s higher probable upside, analysts plainly believe Sohu.com is more favorable than Perfect World Co..

Insider and 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 endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Perfect World Co. 4.50% 3.99% 2.60%
Sohu.com -16.83% -17.02% -10.43%

Valuation & Earnings

This table compares Perfect World Co. and Sohu.com’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Perfect World Co. N/A N/A N/A N/A N/A
Sohu.com $1.62 billion 1.09 $34.28 million ($7.06) -6.42

Sohu.com has higher revenue and earnings than Perfect World Co..

Summary

Sohu.com beats Perfect World Co. on 5 of the 8 factors compared between the two stocks.

Perfect World Co. Company Profile

Perfect World Co., Ltd. is a holding company. The Company, through its subsidiaries, develops and operates online games. It operates in two segments: PRC operations and International operations. The PRC operating segment includes PRC online game business. The International operating segment includes United States online game business, Runic Games and Unknown Worlds. Its portfolio of self-developed online games includes massively multiplayer online role playing games (MMORPGs): Perfect World, Legend of Martial Arts, Perfect World II, Zhu Xian, Chi Bi, Pocketpet Journey West, Battle of the Immortals, Fantasy Zhu Xian, Forsaken World, Empire of the Immortals, Return of the Condor Heroes and Legend of the Condor Heroes, among others. It also offers Web and mobile games, such as Return of the Condor Heroes, Forsaken World, CrossGate Mobile, Forever Mars, Dawn after Dark and Swordsman Mobile. It operates its games in North America, Europe, Japan, Korea and Southeast Asia.

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.

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