Contrasting Baidu (NASDAQ:BIDU) & Xunlei (NASDAQ:XNET)

Baidu (NASDAQ:BIDU) and Xunlei (NASDAQ:XNET) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Insider and Institutional Ownership

5.1% of Xunlei shares are held by institutional investors. 16.7% of Baidu shares are held by company insiders. Comparatively, 21.7% of Xunlei shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Baidu and Xunlei’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baidu	19.45%	8.35%	5.29%
Xunlei	-0.97%	5.39%	3.70%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baidu	$18.24 billion	1.64	$3.26 billion	$10.08	8.58
Xunlei	$324.40 million	0.82	$1.22 million	($0.06)	-71.17

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baidu	0	11	7	0	2.39
Xunlei	0	0	0	0	0.00

Baidu currently has a consensus target price of $107.82, indicating a potential upside of 24.70%. Given Baidu’s stronger consensus rating and higher probable upside, analysts clearly believe Baidu is more favorable than Xunlei.

Risk and Volatility

Baidu has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, Xunlei has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Summary

Baidu beats Xunlei on 11 of the 14 factors compared between the two stocks.

About Baidu

Baidu, Inc. engages in the provision of internet search services in China. It operates through two segments: Baidu Core and iQIYI. The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with personalized timeline based on their demographics and interests; Baidu Health that helps users to find the doctor and hospital for healthcare needs; and Haokan, a short video app. It also provides Baidu Knows, an online community where users can ask questions to other users; Baidu Wiki; Baidu Experience; Baidu Post; ERNIE Bot, conversational AI bot; Baidu Wenku; Baidu Maps, a voice-enabled mobile app that provides travel-related services; Baidu Drive; Baijiahao; and DuerOS, a smart assistant platform. In addition, it offers online marketing services, which include pay for performance, an auction-based services that allow customers to bid for priority placement of paid sponsored links and reach users who search for information related to their products or services; other marketing services that include display-based marketing services and other online marketing services based on performance criteria other than cost per click; mobile ecosystem, a portfolio of apps, including Baidu App, Haokan, and Baidu Post; various cloud services and solutions, such as platform as a service, software as a service, and infrastructure as a service; self-driving services, including maps, automated valet parking, navigation pilot, electric vehicles, and robotaxi fleets, as well as Xiaodu smart devices. Further, the company provides iQIYI, an online entertainment service, including original and licensed content; other video content and membership; and online advertising services. It has strategic partnership with Zhejiang Geely Holding Group. The company was formerly known as Baidu.com, Inc. Baidu, Inc. was incorporated in 2000 and is headquartered in Beijing, China.

About Xunlei

Xunlei Limited, together with its subsidiaries, operates an internet platform for digital media content in the People's Republic of China. Its platform is based on cloud technology that enables users to access, store, manage, and consume digital media content. The company offers Xunlei Accelerator, which enables users to accelerate digital transmission over the internet; mobile acceleration plug-in, which provides mobile device users with benefits of download speed acceleration and download success rate improvements; and subscription services that offer users premium services through Green Channel and Fast Bird products. It also provides Mobile Xunlei, a mobile application that allows users to search, download, consume, and store digital media content; Xunlei Media Player, which supports online and offline play of digital media content, as well as simultaneous play of digital media content while it is being transmitted by Xunlei Accelerator; online games through online game website and mobile app; advertising services; live streaming products, including video and audio livestreaming; and develops software and computer software, as well as other internet value-added services. In addition, the company offers cloud computing services through OneThing Cloud, and StellarCloud; and hardware for edging computing, such as OneThing Edge Cube, and OneThing Edge Atom. Further it offers ThunderChain, a blockchain infrastructure product that enables its users to develop and manage blockchain applications. The company was formerly known as Giganology Limited and changed its name to Xunlei Limited in January 2011. Xunlei Limited was founded in 2003 and is headquartered in Shenzhen, the People's Republic of China.