Head to Head Review: Qutoutiao (NASDAQ:QTT) versus Switch (NASDAQ:SWCH)

Qutoutiao (NASDAQ:QTT) and Switch (NYSE:SWCH) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Earnings & Valuation

This table compares Qutoutiao and Switch’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Qutoutiao $43.70 million 24.57 -$282.54 million ($2.10) -1.80
Switch $405.86 million 8.50 $4.05 million $0.09 156.33

Switch has higher revenue and earnings than Qutoutiao. Qutoutiao is trading at a lower price-to-earnings ratio than Switch, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Qutoutiao has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Switch has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Qutoutiao and Switch, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Qutoutiao 0 2 1 0 2.33
Switch 0 1 5 0 2.83

Qutoutiao presently has a consensus price target of $12.67, suggesting a potential upside of 234.21%. Switch has a consensus price target of $13.67, suggesting a potential downside of 3.35%. Given Qutoutiao’s higher possible upside, equities analysts plainly believe Qutoutiao is more favorable than Switch.

Profitability

This table compares Qutoutiao and Switch’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Qutoutiao -55.72% -225.76% -97.72%
Switch 1.05% 2.60% 1.24%

Insider and Institutional Ownership

6.7% of Qutoutiao shares are held by institutional investors. Comparatively, 21.4% of Switch shares are held by institutional investors. 28.4% of Switch shares are held by company 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

Switch pays an annual dividend of $0.12 per share and has a dividend yield of 0.9%. Qutoutiao does not pay a dividend. Switch pays out 133.3% 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

Switch beats Qutoutiao on 12 of the 16 factors compared between the two stocks.

About Qutoutiao

Qutoutiao Inc. operates mobile platforms for the distribution, consumption, and sharing of light entertainment content in the People's Republic of China. The company operates Qutoutiao, a mobile application that aggregates articles and short videos from professional media and freelancers and presents customized feeds to users; and Quduopai, a mobile application that allows users to create, upload, and view videos. It also provides Midu Novels, a mobile literature application that offers users free literature supported by advertising. The company was formerly known as Qtech Ltd. and changed its name to Qutoutiao Inc. in July 2018. Qutoutiao Inc. was founded in 2016 and is headquartered in Shanghai, China.

About Switch

Switch, Inc., through its subsidiary, Switch, Ltd., provides colocation space and related services primarily to technology and digital media companies in the United States. It develops and operates data centers in Nevada and Michigan. The company also serves cloud and managed service providers, financial institutions, IT and software providers, government agencies, network and telecommunications providers, and others that conduct critical business on the Internet. Switch, Inc. was founded in 2000 and is headquartered in Las Vegas, Nevada.

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