Comparing International Business Machines (NYSE:IBM) and VNET Group (NASDAQ:VNET)

International Business Machines (NYSE:IBM) and VNET Group (NASDAQ:VNET) are both technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Volatility and Risk

International Business Machines has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, VNET Group has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500.

Institutional & Insider Ownership

59.0% of International Business Machines shares are owned by institutional investors. Comparatively, 72.8% of VNET Group shares are owned by institutional investors. 0.3% of International Business Machines shares are owned by company insiders. Comparatively, 12.1% of VNET Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares International Business Machines and VNET Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Business Machines	$67.53 billion	3.26	$10.59 billion	$11.27	20.77
VNET Group	$10.74 billion	0.11	-$36.01 million	($1.42)	-3.10

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

Analyst Recommendations

This is a breakdown of current ratings for International Business Machines and VNET Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Business Machines	2	12	19	0	2.52
VNET Group	1	1	4	0	2.50

International Business Machines presently has a consensus target price of $254.96, indicating a potential upside of 8.94%. VNET Group has a consensus target price of $16.90, indicating a potential upside of 284.03%. Given VNET Group’s higher probable upside, analysts plainly believe VNET Group is more favorable than International Business Machines.

Profitability

This table compares International Business Machines and VNET Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Business Machines	15.52%	35.65%	7.54%
VNET Group	-22.29%	-36.25%	-4.43%

Summary

International Business Machines beats VNET Group on 11 of the 14 factors compared between the two stocks.

About International Business Machines

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.

About VNET Group

VNET Group, Inc., an investment holding company, provides hosting and related services in China. It offers managed hosting services consisting of managed retail services, such as colocation services that dedicate data center space to house customers' servers and networking equipment, as well as allow customers to lease partial or entire cabinets for their servers; interconnectivity services that allow customers to connect their servers; value-added services, including hybrid IT, bare metal, firewall, server load balancing, data backup and recovery, data center management, server management, and backup server services; cloud services that allow customers to run applications over the internet using IT infrastructure; and VPN Services that extend customers' private networks by setting up connections through the public internet. The company also provides server administration services, such as operating system support and assistance with updates, server monitoring, server backup and restoration, server security evaluation, firewall services, and disaster recovery services. It serves information technology and cloud services, communications and social networking, gaming and entertainment, e-commerce, automobile, financial services, and blue-chip and small-to-mid-sized enterprises; government agencies; individuals; and telecommunication carriers. The company was formerly known as 21Vianet Group, Inc. and changed its name to VNET Group, Inc. in October 2021. VNET Group, Inc. was founded in 1999 and is headquartered in Beijing, the People's Republic of China.