Financial Review: Square (SQ) vs. China Information Technology (CNIT)

Square (NYSE: SQ) and China Information Technology (NASDAQ:CNIT) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Earnings and Valuation

This table compares Square and China Information Technology’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Square $1.71 billion 7.99 -$171.59 million ($0.16) -219.63
China Information Technology $10.19 million 5.76 -$18.17 million ($0.45) -3.24

China Information Technology has lower revenue, but higher earnings than Square. Square is trading at a lower price-to-earnings ratio than China Information Technology, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for Square and China Information Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Square 1 13 21 0 2.57
China Information Technology 0 0 0 0 N/A

Square presently has a consensus target price of $33.86, indicating a potential downside of 3.63%. Given Square’s higher probable upside, equities research analysts plainly believe Square is more favorable than China Information Technology.

Volatility and Risk

Square has a beta of 4.8, indicating that its share price is 380% more volatile than the S&P 500. Comparatively, China Information Technology has a beta of 2.15, indicating that its share price is 115% more volatile than the S&P 500.

Insider & Institutional Ownership

54.2% of Square shares are held by institutional investors. Comparatively, 1.1% of China Information Technology shares are held by institutional investors. 32.7% of Square shares are held by insiders. Comparatively, 45.4% of China Information Technology shares are held 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.

Profitability

This table compares Square and China Information Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Square -3.04% -7.98% -3.18%
China Information Technology N/A N/A N/A

Summary

Square beats China Information Technology on 7 of the 13 factors compared between the two stocks.

About Square

Square, Inc. (Square) is a commerce ecosystem. The Company enables its sellers start, run and grow their businesses. It combines software with hardware to enable sellers to turn mobile devices and computing devices into payments and point-of-sale solutions. Once a seller downloads the Square Point of Sale mobile application, they can take their first payment. With its offering, a seller can accept payments in person via magnetic stripe (a swipe), Europay, MasterCard, and Visa (EMV) (a dip), or Near Field Communication (NFC) (a tap); or online via Square Invoices, Square Virtual Terminal, or the seller’s Website. Once on its system, sellers gain access to technology and features, such as reporting and analytics, next-day settlements, digital receipts, payment dispute management and chargeback protection, and Payment Card Industry (PCI) compliance. On the consumer (buyer) side, Square Cash offers individuals access to a way to send and receive money.

About China Information Technology

China Information Technology, Inc (CNIT) is a leading Internet service company that provides integrated cloud-based solutions enabling innovation and smart living in the fields of new media, elevator safety management, education, etc. Through continuous innovation, CNIT is aiming to leverage its proprietary Cloud-Application-Terminal technology to level the competitive landscape in the new media industry and deliver value for its shareholders, employees, customers, and the community.

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