Financial Survey: StoneCo (NASDAQ:STNE) and JOYY (NASDAQ:YY)

JOYY (NASDAQ:YY) and StoneCo (NASDAQ:STNE) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.

Insider and Institutional Ownership

36.8% of JOYY shares are owned by institutional investors. Comparatively, 73.2% of StoneCo shares are owned by institutional investors. 43.0% of JOYY shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for JOYY and StoneCo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JOYY	0	3	0	0	2.00
StoneCo	0	3	7	0	2.70

JOYY presently has a consensus price target of $42.00, suggesting a potential upside of 26.28%. StoneCo has a consensus price target of $19.00, suggesting a potential upside of 12.63%. Given JOYY’s higher probable upside, research analysts plainly believe JOYY is more favorable than StoneCo.

Earnings and Valuation

This table compares JOYY and StoneCo’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JOYY	$2.27 billion	0.91	$301.82 million	$4.97	6.69
StoneCo	$2.41 billion	2.20	$318.89 million	$1.01	16.70

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

Risk & Volatility

JOYY has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500. Comparatively, StoneCo has a beta of 2.39, meaning that its share price is 139% more volatile than the S&P 500.

Profitability

This table compares JOYY and StoneCo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JOYY	13.31%	5.13%	3.15%
StoneCo	13.35%	11.23%	3.62%

Summary

StoneCo beats JOYY on 11 of the 14 factors compared between the two stocks.

About JOYY

JOYY Inc., together with its subsidiaries, operates social media platforms that offer users engaging and experience across various video-based social platforms. The company operates Bigo Live, a social live streaming platform that allows users to live stream specific moments, such as showcase talents, socialize, and connect with other users worldwide; Likee, a short-form video social platform that focuses on enabling users to create short-form video; Hago, a multiuser social networking platform that provides casual games; imo, an instant messaging application with functions, including video calls and other communication tools, such as group calls, document sharing, etc.; and Shopline, a smart commerce enabler that provides an integrated omnichannel platform for merchants to create and grow brands online and reach customers. It operates in the People's Republic of China, the United States, the Great Britain, Japan, South Korea, Australia, the Middle East, Southeast Asia, and internationally. The company was formerly known as YY Inc. and changed its name to JOYY Inc. in December 2019. JOYY Inc. was founded in 2005 and is headquartered in Singapore.

About StoneCo

StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and sells solutions to brick-and-mortar and digital merchants through sales team. The company served approximately 2.6 million clients primarily small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands.