Head-To-Head Contrast: iQIYI (NASDAQ:IQ) versus Sprout Social (NASDAQ:SPT)

Sprout Social (NASDAQ:SPT) and iQIYI (NASDAQ:IQ) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Analyst Recommendations

This is a summary of current ratings and price targets for Sprout Social and iQIYI, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprout Social	0	6	6	0	2.50
iQIYI	1	4	3	0	2.25

Sprout Social currently has a consensus price target of $27.36, indicating a potential upside of 73.30%. iQIYI has a consensus price target of $2.51, indicating a potential downside of 5.13%. Given Sprout Social’s stronger consensus rating and higher possible upside, analysts clearly believe Sprout Social is more favorable than iQIYI.

Risk & Volatility

Sprout Social has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, iQIYI has a beta of -0.14, meaning that its stock price is 114% less volatile than the S&P 500.

Profitability

This table compares Sprout Social and iQIYI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprout Social	-12.70%	-25.95%	-10.67%
iQIYI	0.32%	2.26%	0.66%

Valuation and Earnings

This table compares Sprout Social and iQIYI”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprout Social	$405.91 million	2.29	-$61.97 million	($0.95)	-16.62
iQIYI	$4.00 billion	0.64	$104.68 million	$0.01	265.00

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

Insider and Institutional Ownership

52.7% of iQIYI shares are owned by institutional investors. 10.1% of Sprout Social shares are owned by insiders. Comparatively, 57.8% of iQIYI shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

iQIYI beats Sprout Social on 9 of the 14 factors compared between the two stocks.

About Sprout Social

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides cloud software for social messaging, data and workflows in a unified system of record, intelligence, and action. It offers integrated tools, such as social engagement/response; publishing; reporting and analytics; social listening and business intelligence; reputation management; social commerce; employee advocacy; and automation and workflows. In addition, the company provides smart inbox, social customer relationship management, social monitoring and alerts, customer service tools, and automation; and centralized content planning, creation, and publishing, automated scheduling, content performance reporting, suggested content, message approval workflows, publishing permissions and governance, and content and asset libraries. Further, it offers social media; content performance, customer service and team, custom report builder, and reporting API; and market research, brand health, competitive insights, consumer trends, and product feedback; and social commerce, reputation management, employee advocacy, mobile applications, and chat bot creation and management. Additionally, the company offers professional services consisting of consulting and training services. It serves social and community management; public relations; marketing; influencer marketing; customer service and care; commerce, sales and customer acquisition; recruiting and hiring, product development, and business strategy; and small-and-medium-sized businesses, mid-market companies, enterprises, marketing agencies, government, non-profit, and educational institutions. Sprout Social, Inc. was incorporated in 2010 and is headquartered in Chicago, Illinois.

About iQIYI

iQIYI, Inc., together with its subsidiaries, provides online entertainment video services in the People's Republic of China. It offers various products and services, including online video, online games, online literature, animations, and other products. The company operates a platform that provides a collection of internet video content, such as professionally produced content licensed from professional content providers and self-produced content. It also offers membership, online advertising, content distribution, and live broadcasting services. In addition, the company operates iQIYI Show, a live broadcasting platform that enables users to follow their favorite hosts and shows in real time through live broadcasting; and iQIYI Lite that offers an easy and quick access to the personalized videos based on their user preferences. Further, it is involved in the talent agency and IP licensing activities, as well as engages in developing a video community app. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu, Inc.