Financial Contrast: Tucows (TCX) and YY (YY)
Tucows (NASDAQ: TCX) and YY (NASDAQ:YY) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.
Risk and Volatility
Tucows has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500. Comparatively, YY has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.
This is a summary of current ratings and recommmendations for Tucows and YY, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
YY has a consensus price target of $70.21, indicating a potential downside of 8.94%. Given YY’s higher possible upside, analysts clearly believe YY is more favorable than Tucows.
Earnings and Valuation
This table compares Tucows and YY’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Tucows||$251.66 million||2.14||$29.37 million||$1.43||35.77|
|YY||$1.43 billion||3.02||$369.82 million||$5.24||14.72|
YY has higher revenue and earnings than Tucows. YY is trading at a lower price-to-earnings ratio than Tucows, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
43.9% of Tucows shares are owned by institutional investors. Comparatively, 54.7% of YY shares are owned by institutional investors. 13.2% of Tucows shares are owned by insiders. Comparatively, 43.0% of YY shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Tucows and YY’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
YY beats Tucows on 10 of the 13 factors compared between the two stocks.
Tucows Inc. is engaged in providing Internet services. The Company’s segments include Network Access Services and Domain Services. The Network Access Services segment includes mobile, fixed high-speed Internet access services, Internet hosting and network consulting services. The Domain Services segment wholesale and retail domain name registration services, value added services and portfolio services. The Company focuses on serving the needs of this network of resellers by providing services, interfaces, proactive and attentive customer service, reseller-oriented technology and agile design and development processes. The Company focuses its service offerings under brands, including OpenSRS, YummyNames, Platypus, Hover and Ting. As of December 31, 2016, the OpenSRS Domain Service managed 15 million domain names under the Tucows ICANN registrar accreditation and for other registrars. As of December 31, 2016, Ting managed mobile telephony services for approximately 151,000 subscribers.
YY Inc. (YY) is a social platform that engages users in real-time online group activities through voice, video and text on personal computers and mobile devices. The Company’s segments include YY IVAS and others, Huya broadcasting, and 100 Education. YY enables users to create and organize groups of varying sizes to discover and participate in a range of online activities, including music shows, online games, dating shows, live game broadcasting and e-learning. YY offers users an entertainment experience through its social community. It owns the domain names of YY.com, Duowan.com, 100.com, Huya.com, Edu24ol.com and Zhiniu8.com. The Company’s YY platform, including YY.com, is jointly operated by personnel from Guangzhou Huaduo and Zhuhai Duowan. Its product, YY Client, enables users to engage in live interactions online. Its Web-based YY enables users to conduct real-time interactions through Web browsers without requiring any downloads or installations.
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