Gridsum Holding (NASDAQ: GSUM) and National Instruments Corporation (NASDAQ:NATI) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Profitability

This table compares Gridsum Holding and National Instruments Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gridsum Holding -26.87% -16.80% -10.15%
National Instruments Corporation 8.72% 10.16% 7.64%

Volatility and Risk

Gridsum Holding has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, National Instruments Corporation has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Earnings & Valuation

This table compares Gridsum Holding and National Instruments Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gridsum Holding N/A N/A N/A ($0.90) -9.61
National Instruments Corporation $1.25 billion 4.70 $189.72 million $0.84 53.57

National Instruments Corporation has higher revenue and earnings than Gridsum Holding. Gridsum Holding is trading at a lower price-to-earnings ratio than National Instruments Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Gridsum Holding and National Instruments Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gridsum Holding 0 0 0 0 N/A
National Instruments Corporation 0 1 2 0 2.67

National Instruments Corporation has a consensus price target of $38.33, indicating a potential downside of 14.81%. Given National Instruments Corporation’s higher possible upside, analysts plainly believe National Instruments Corporation is more favorable than Gridsum Holding.

Institutional and Insider Ownership

30.4% of Gridsum Holding shares are held by institutional investors. Comparatively, 80.6% of National Instruments Corporation shares are held by institutional investors. 9.9% of National Instruments Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

National Instruments Corporation pays an annual dividend of $0.84 per share and has a dividend yield of 1.9%. Gridsum Holding does not pay a dividend. National Instruments Corporation pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

National Instruments Corporation beats Gridsum Holding on 11 of the 12 factors compared between the two stocks.

About Gridsum Holding

Gridsum Holding Inc. is a holding company. The Company provides data analysis software for multinational and domestic enterprises, and government agencies in China. The Company’s technology, the Gridsum Big Data Platform performs multi-dimensional correlation analysis and analyzes real-time events. The Company offers various types of solutions and technologies. The Company’s software products are designed for a range of commercial and governmental applications. The Company’s products focus on digital marketing analytics and automation solutions. The Company offers Web analytics solutions based on data warehouse technology to build solutions on a distributed data warehouse architecture, using the open-source Hadoop framework. The Company delivers its solutions as cloud-based software-as-a-service (SaaS) offerings that manage information technology (IT) support costs by outsourcing hardware and software maintenance and support.

About National Instruments Corporation

National Instruments Corporation (NI) designs, manufactures and sells systems to engineers and scientists. The Company offers a line of measurement, automation and control products. It offers products, technology and services, which include system design software, programming tools, application software, modular hardware products and related driver software, production test systems, NI education platform, software products for teaching and hardware products for teaching. It also offers NI Services, including hardware services and maintenance, software maintenance services, and training and certification. Its products are used across various industries in a range of applications, including research and development, simulation and modeling, prototype and validation, production testing and industrial control and field and factory service and repair. It serves various industries and applications, such as consumer electronics, commercial aerospace, telecommunications and others.

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