Analyzing Snail (NASDAQ:SNAL) & NetEase (NASDAQ:NTES)

Snail (NASDAQ:SNAL) and NetEase (NASDAQ:NTES) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Insider and Institutional Ownership

0.4% of Snail shares are held by institutional investors. Comparatively, 11.1% of NetEase shares are held by institutional investors. 77.4% of Snail shares are held by insiders. Comparatively, 54.7% of NetEase shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Snail and NetEase, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Snail	0	0	0	0	0.00
NetEase	0	1	7	0	2.88

NetEase has a consensus target price of $119.38, suggesting a potential downside of 7.22%. Given NetEase’s stronger consensus rating and higher probable upside, analysts clearly believe NetEase is more favorable than Snail.

Valuation and Earnings

This table compares Snail and NetEase”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Snail	$84.47 million	0.63	$1.83 million	$0.04	35.88
NetEase	$14.43 billion	5.65	$4.07 billion	$6.95	18.51

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

Profitability

This table compares Snail and NetEase’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Snail	-0.11%	-3.17%	-0.15%
NetEase	30.12%	23.08%	16.90%

Volatility and Risk

Snail has a beta of 0.08, meaning that its stock price is 92% less volatile than the S&P 500. Comparatively, NetEase has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Summary

NetEase beats Snail on 12 of the 14 factors compared between the two stocks.

About Snail

Snail, Inc., together with its subsidiaries, researches, develops, markets, publishes, and distributes interactive digital entertainment for consumers worldwide. It offers games, content, and support for various platforms, including game consoles, personal computers, mobile phones, and tablets. Snail, Inc. was founded in 2009 and is headquartered in Culver City, California. Snail, Inc. operates as a subsidiary of Olive Wood Global Development Limited.

About NetEase

NetEase, Inc. engages in online games, music streaming, online intelligent learning services, and internet content services businesses in China and internationally . The company operates through Games and Related Value-Added Services, Youdao, Cloud Music, and Innovative Businesses and Others segments. It develops and operates PC and mobile games, as well as offers games licensed from other game developers. The company's products and services include Youdao Dictionary, an online knowledge tool; Youdao Translation, a tool specifically designed to support translation needs of business and leisure travelers; U-Dictionary, an online dictionary and translation app; Youdao Kids' Dictionary, a smart and fun tool; smart devices, such as Youdao Dictionary Pen, Youdao Smart Learning Pad, Youdao Listening Pod, Youdao Smart Light, Youdao Pocket Translator, and Youdao Super Dictionary; online courses; interactive learning apps; and education digitalization solutions, such as Youdao Smart Learning Terminal, a device that automates paper-based homework processing; Youdao Smart Cloud, a cloud-based platform that allows third-party app developers, smart device brands, and manufacturers to the company's OCR capabilities; and Youdao Sports, a sports-centric educational system. Its products and services also include NetEase Cloud Music, a music streaming platform; Yanxuan, an e-commerce platform, which sells private label products; www.163.com portal and related mobile app, Wangyi Xinwen, which deliver information such as news, sports events, technology, fashion trends, and online entertainment; NetEase Mail, an email service; NetEase CC Live streaming, a live streaming platform with a focus on game broadcasting; and NetEase Pay, a payment platform. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Hangzhou, the People's Republic of China.