NetEase (NASDAQ:NTES) & Sound Group (NASDAQ:SOGP) Financial Contrast

Sound Group (NASDAQ:SOGP) and NetEase (NASDAQ:NTES) are both communication services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Insider and Institutional Ownership

1.6% of Sound Group shares are owned by institutional investors. Comparatively, 11.1% of NetEase shares are owned by institutional investors. 25.2% of Sound Group shares are owned by company insiders. Comparatively, 54.7% of NetEase shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Sound Group and NetEase”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Group	$443.69 million	0.08	$32.39 million	($1.21)	-8.97
NetEase	$16.11 billion	4.79	$4.83 billion	$7.26	16.61

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

Volatility & Risk

Sound Group has a beta of 2.44, meaning that its share price is 144% more volatile than the S&P 500. Comparatively, NetEase has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Sound Group and NetEase, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Group	0	1	0	0	2.00
NetEase	0	3	7	0	2.70

NetEase has a consensus target price of $163.62, indicating a potential upside of 35.66%. Given NetEase’s stronger consensus rating and higher probable upside, analysts plainly believe NetEase is more favorable than Sound Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sound Group	N/A	N/A	N/A
NetEase	27.86%	19.50%	14.45%

Summary

NetEase beats Sound Group on 13 of the 14 factors compared between the two stocks.

About Sound Group

Sound Group Inc. operates as an audio-centric social and entertainment company. It focuses on building audio platform to connect and communicate. The company, through its product portfolio and in-house technologies, caters to user interest in audio entertainment and social networking. The company was formerly known as LIZHI INC. and changed its name to Sound Group Inc. in January 2024. Sound Group Inc. was founded in 2010 and is based in Singapore.

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.