Contrasting NetEase (NASDAQ:NTES) & Ringcentral (NYSE:RNG)

Ringcentral (NYSE:RNG) and NetEase (NASDAQ:NTES) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Ringcentral and NetEase, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ringcentral	1	9	4	0	2.21
NetEase	0	2	6	0	2.75

Ringcentral presently has a consensus price target of $30.6154, suggesting a potential upside of 10.25%. NetEase has a consensus price target of $120.00, suggesting a potential downside of 8.38%. Given Ringcentral’s higher probable upside, research analysts plainly believe Ringcentral is more favorable than NetEase.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ringcentral	-0.50%	-19.63%	6.10%
NetEase	30.12%	23.08%	16.90%

Institutional & Insider Ownership

98.6% of Ringcentral shares are held by institutional investors. Comparatively, 11.1% of NetEase shares are held by institutional investors. 7.0% of Ringcentral shares are held by company insiders. Comparatively, 54.7% of NetEase shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ringcentral	$2.40 billion	1.04	-$58.29 million	($0.14)	-198.36
NetEase	$14.43 billion	5.75	$4.07 billion	$6.95	18.84

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

Volatility and Risk

Ringcentral has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, NetEase has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Summary

NetEase beats Ringcentral on 11 of the 14 factors compared between the two stocks.

About Ringcentral

RingCentral, Inc., together with its subsidiaries, provides cloud communications, video meetings, collaboration, and contact center software-as-a-service solutions worldwide. The company’s products include RingCentral Message Video Phone that provides a unified experience for communication and collaboration across multiple modes, including HD voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax; RingCentral Contact Center, a collaborative contact center solution that delivers AI-powered omnichannel and workforce engagement solutions with integrated RingCentral MVP; and RingCX, an AI-powered contact center that a native delivers omnichannel experience. It provides RingCentral Video, a video meeting service that includes the company’s RCV video and team messaging capabilities; offers video and audio conferencing, team messaging, file sharing, contact, task, and calendar management, as well as pre-meeting, in-meeting, and post-meeting capabilities. In addition, the company offers RingCentral Professional Services, which include consultation, UCaaS and CCaaS implementation, VoIP phone system adoption, configuring custom workflows, customer and user onboarding, ongoing support, advanced support, managed services, and more. It serves a range of industries, including financial services, education, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, state and local government, and others. It sells its products to enterprise customers, as well as small and medium-sized businesses through resellers and distributors, partners, and global service providers. RingCentral, Inc. was incorporated in 1999 and is headquartered in Belmont, California.

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.