Head-To-Head Contrast: Cheetah Mobile (CMCM) vs. GrubHub (GRUB)

GrubHub (NYSE: GRUB) and Cheetah Mobile (NYSE:CMCM) are both mid-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.

Earnings and Valuation

This table compares GrubHub and Cheetah Mobile’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GrubHub $493.33 million 12.41 $49.55 million $0.68 103.84
Cheetah Mobile $657.45 million 3.42 -$11.59 million $0.39 40.18

GrubHub has higher earnings, but lower revenue than Cheetah Mobile. Cheetah Mobile is trading at a lower price-to-earnings ratio than GrubHub, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GrubHub and Cheetah Mobile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GrubHub 9.60% 7.45% 6.07%
Cheetah Mobile 7.44% 10.76% 6.35%

Institutional & Insider Ownership

7.2% of Cheetah Mobile shares are owned by institutional investors. 2.4% of GrubHub shares are owned by insiders. Comparatively, 17.1% of Cheetah Mobile 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.

Risk and Volatility

GrubHub has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, Cheetah Mobile has a beta of 3.23, indicating that its stock price is 223% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for GrubHub and Cheetah Mobile, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GrubHub 1 10 12 0 2.48
Cheetah Mobile 0 3 0 0 2.00

GrubHub presently has a consensus price target of $61.81, indicating a potential downside of 12.46%. Cheetah Mobile has a consensus price target of $11.67, indicating a potential downside of 25.55%. Given GrubHub’s stronger consensus rating and higher probable upside, equities analysts clearly believe GrubHub is more favorable than Cheetah Mobile.

Summary

GrubHub beats Cheetah Mobile on 8 of the 14 factors compared between the two stocks.

GrubHub Company Profile

Grubhub Inc. provides an online and mobile platform for restaurant pick-up and delivery orders. Its products include Grubhub and Seamless Mobile Applications and Mobile Website, Grubhub and Seamless Websites, Corporate Program, Delivery, Allmenus and MenuPages, Grubhub for Restaurants, and Restaurant Websites. As of December 31, 2016, the Company connected more than 50,000 local restaurants with diners in more than 1,100 cities across the United States. In certain markets, the Company also provides delivery services to restaurants on its platform that do not have their own delivery operations. The Company provides diners on the platform with a personalized platform that helps them search for local restaurants and then place an order from an Internet-connected device. It also provides diners with information about their orders and status. The Company also provides delivery services to restaurants on its platform that do not have their own delivery operations.

Cheetah Mobile Company Profile

Cheetah Mobile Inc. is a holding company. The Company and its consolidated subsidiaries, variable interest entities (VIEs) and a VIE’s subsidiary are engaged in the provision of online marketing services, Internet value-added services, and Internet security services and others. The Company operates a platform that offers mobile and personal computer (PC) applications for its users and global content promotional channels for its customers, both of which are powered by its cloud-based data analytics engines. For its users, its diversified suite of applications optimizes mobile and PC Internet system performance, and provides real time protection against known and unknown security threats. Its data analytics engines perform real time analysis of mobile applications, program files and Websites on their devices for behavior that may impair system performance or impose security risks.

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