Head to Head Comparison: NetEase (NASDAQ:NTES) & Sphere Entertainment (NYSE:SPHR)

NetEase (NASDAQ:NTES) and Sphere Entertainment (NYSE:SPHR) are both communication services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for NetEase and Sphere Entertainment, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NetEase	0	3	7	0	2.70
Sphere Entertainment	0	2	11	0	2.85

NetEase currently has a consensus target price of $158.38, indicating a potential upside of 19.78%. Sphere Entertainment has a consensus target price of $163.38, indicating a potential upside of 2.40%. Given NetEase’s higher possible upside, equities analysts plainly believe NetEase is more favorable than Sphere Entertainment.

Risk & Volatility

NetEase has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Sphere Entertainment has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.

Insider & Institutional Ownership

11.1% of NetEase shares are owned by institutional investors. Comparatively, 92.0% of Sphere Entertainment shares are owned by institutional investors. 54.7% of NetEase shares are owned by insiders. Comparatively, 22.1% of Sphere Entertainment shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares NetEase and Sphere Entertainment”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NetEase	$16.11 billion	5.26	$4.83 billion	$7.53	17.56
Sphere Entertainment	$1.22 billion	4.70	$33.40 million	($2.68)	-59.54

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NetEase	29.85%	21.04%	15.59%
Sphere Entertainment	-6.19%	-1.38%	-0.74%

Summary

NetEase beats Sphere Entertainment on 10 of the 14 factors compared between the two stocks.

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.

About Sphere Entertainment

Sphere Entertainment Co. engages in the entertainment business. It produces, presents, or hosts various live entertainment events, including concerts, family shows, and special events, as well as sporting events, such as professional boxing, college basketball and hockey, professional bull riding, mixed martial arts, and esports and wrestling in its venues, including The Garden, Hulu Theater, Radio City Music Hall, and the Beacon Theatre in New York City; and The Chicago Theatre. The company also operates entertainment dining and nightlife venues markets under the Tao, Marquee, Lavo, Beauty & Essex, Cathédrale, Hakkasan, and Omnia brand names. The company was formerly known as Madison Square Garden Entertainment Corp. and changed its name to Sphere Entertainment Co. in April 2023. Sphere Entertainment Co. was founded in 2006 and is based in New York, New York.