Contrasting HUYA (NYSE:HUYA) & Red Violet (NASDAQ:RDVT)

HUYA (NYSE:HUYA) and Red Violet (NASDAQ:RDVT) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

23.2% of HUYA shares are held by institutional investors. Comparatively, 63.6% of Red Violet shares are held by institutional investors. 1.2% of HUYA shares are held by insiders. Comparatively, 8.9% of Red Violet shares are held 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.

Valuation and Earnings

This table compares HUYA and Red Violet”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HUYA	$832.84 million	0.92	-$6.57 million	($0.07)	-48.64
Red Violet	$75.19 million	8.17	$7.00 million	$0.61	72.15

Red Violet has lower revenue, but higher earnings than HUYA. HUYA is trading at a lower price-to-earnings ratio than Red Violet, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares HUYA and Red Violet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HUYA	-1.90%	1.82%	1.31%
Red Violet	10.87%	10.01%	9.21%

Analyst Ratings

This is a summary of current recommendations and price targets for HUYA and Red Violet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HUYA	0	5	1	0	2.17
Red Violet	0	0	1	0	3.00

HUYA currently has a consensus target price of $4.5667, indicating a potential upside of 34.12%. Red Violet has a consensus target price of $60.00, indicating a potential upside of 36.33%. Given Red Violet’s stronger consensus rating and higher possible upside, analysts clearly believe Red Violet is more favorable than HUYA.

Volatility & Risk

HUYA has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Red Violet has a beta of 1.82, indicating that its stock price is 82% more volatile than the S&P 500.

Summary

Red Violet beats HUYA on 12 of the 13 factors compared between the two stocks.

About HUYA

HUYA Inc., together with its subsidiaries, operates game live streaming platforms in the People's Republic of China. Its platforms enable broadcasters and viewers to interact during live streaming. The company's live streaming content also covers other entertainment content, such as talent shows, anime, outdoor activities, live chats, and other genres. In addition, it operates Nimo TV, a game live streaming platform in international markets. Further, the company provides online advertising, cnt, internet value added, and cultural and creative services. The company was founded in 2014 and is headquartered in Guangzhou, China. HUYA Inc. is a subsidiary of Tencent Holdings Limited.

About Red Violet

Red Violet, Inc., a software and services company, specializes in proprietary technologies and applying analytical capabilities to deliver identity intelligence in the United States. It offers idiCORE, an investigative solution used to address various organizational challenges, which include due diligence, risk mitigation, identity authentication, fraud detection and prevention, customer acquisition, and regulatory compliance; and FOREWARN, an app-based solution that provides instant knowledge before face-to-face engagement with a consumer, as well as helps professionals to identify and mitigate risk. The company serves financial services, insurance, healthcare, retail, telecommunication companies, law enforcement and government agencies, collections, law, corporate security, and investigative firms. It markets its products and services through value-added distributors, resellers, and strategic partners; and trade shows and seminars, advertising, public relations, distribution of sales literature, and product specifications and ongoing communication with prospective customers, distributors, resellers, strategic partners, and installed base of current customers, as well as through direct sales. The company was incorporated in 2017 and is headquartered in Boca Raton, Florida.