Head to Head Survey: GDS (NASDAQ:GDS) and Backblaze (NASDAQ:BLZE)

GDS (NASDAQ:GDS) and Backblaze (NASDAQ:BLZE) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Volatility & Risk

GDS has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Backblaze has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500.

Earnings and Valuation

This table compares GDS and Backblaze”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GDS	$1.63 billion	3.78	$132.10 million	$2.15	14.33
Backblaze	$156.30 million	4.91	-$25.61 million	($0.34)	-36.47

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

Profitability

This table compares GDS and Backblaze’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GDS	30.70%	17.94%	6.11%
Backblaze	-13.07%	-16.73%	-7.10%

Institutional & Insider Ownership

33.7% of GDS shares are held by institutional investors. Comparatively, 54.0% of Backblaze shares are held by institutional investors. 8.0% of GDS shares are held by company insiders. Comparatively, 4.2% of Backblaze shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for GDS and Backblaze, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GDS	0	2	3	1	2.83
Backblaze	1	1	8	0	2.70

GDS currently has a consensus target price of $48.12, suggesting a potential upside of 56.12%. Backblaze has a consensus target price of $19.71, suggesting a potential upside of 58.99%. Given Backblaze’s higher possible upside, analysts clearly believe Backblaze is more favorable than GDS.

Summary

GDS beats Backblaze on 10 of the 15 factors compared between the two stocks.

About GDS

GDS Holdings Limited, together with its subsidiaries, develops and operates data centers in the People's Republic of China. The company provides colocation services comprising critical facilities space, customer-available power, racks, and cooling; managed hosting services, including business continuity and disaster recovery, network management, data storage, system security, operating system, database, and server middleware services; managed cloud services; and consulting services. It serves cloud service providers, large Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. GDS Holdings Limited was founded in 2001 and is headquartered in Shanghai, the People's Republic of China.

About Backblaze

Backblaze, Inc., a storage cloud platform, provides businesses and consumers cloud services to store, use, and protect data in the United States and internationally. The company offers cloud services through a web-scale software infrastructure built on commodity hardware. It also provides Backblaze B2 Cloud Storage, which enables customers to store data, developers to build applications, and partners to expand their use cases. This service is offered as a consumption-based Infrastructure-as-a-Service (IaaS) and serves use cases, such as public, hybrid, and multi-cloud data storage; application development and DevOps; content delivery and edge computing; security and ransomware protection; media management; backup, archive, and tape replacement; repository for analytics, artificial intelligence and machine learning; and Internet of Things. In addition, the company offers Backblaze Computer Backup that automatically backs up data from laptops and desktops for businesses and individuals, which provides a subscription-based Software-as-a-Service and serves use cases, including computer backup, ransomware protection, theft and loss protection, and remote access. It serves the public cloud IaaS storage and Data-Protection-as-a-Service markets. The company was incorporated in 2007 and is headquartered in San Mateo, California.