The9 (NASDAQ:NCTY) vs. Sprout Social (NASDAQ:SPT) Financial Contrast

Sprout Social (NASDAQ:SPT) and The9 (NASDAQ:NCTY) are both small-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Profitability

This table compares Sprout Social and The9’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprout Social	-6.13%	-8.80%	-3.64%
The9	N/A	N/A	N/A

Risk and Volatility

Sprout Social has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, The9 has a beta of 2.09, indicating that its stock price is 109% more volatile than the S&P 500.

Earnings and Valuation

This table compares Sprout Social and The9″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprout Social	$457.55 million	1.43	-$43.33 million	($0.50)	-21.67
The9	$15.43 million	3.90	-$57.55 million	$6.00	0.66

Sprout Social has higher revenue and earnings than The9. Sprout Social is trading at a lower price-to-earnings ratio than The9, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Sprout Social and The9, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprout Social	2	3	3	1	2.33
The9	1	0	0	0	1.00

Sprout Social presently has a consensus price target of $10.43, indicating a potential downside of 3.74%. Given Sprout Social’s stronger consensus rating and higher probable upside, equities analysts clearly believe Sprout Social is more favorable than The9.

Institutional & Insider Ownership

0.5% of The9 shares are owned by institutional investors. 9.6% of Sprout Social shares are owned by insiders. Comparatively, 30.8% of The9 shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

The9 beats Sprout Social on 9 of the 15 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 The9

The9 Limited operates as a cryptocurrency mining business in China, Eastern Europe, Asia, and North America. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was incorporated in 1999 and is headquartered in Shanghai, the People’s Republic of China.