Head to Head Analysis: iDreamSky Technology (DSKY) vs. Cheetah Mobile (CMCM)

iDreamSky Technology (NASDAQ: DSKY) and Cheetah Mobile (NYSE:CMCM) are both mobile application software companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

Insider & Institutional Ownership

7.2% of Cheetah Mobile shares are held by institutional investors. 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.

Valuation & Earnings

This table compares iDreamSky Technology and Cheetah Mobile’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
iDreamSky Technology N/A N/A N/A $0.18 77.39
Cheetah Mobile $657.45 million 3.42 -$11.59 million $0.36 43.53

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

Profitability

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

Net Margins Return on Equity Return on Assets
iDreamSky Technology -1.50% -1.80% -1.34%
Cheetah Mobile 7.44% 10.76% 6.35%

Analyst Ratings

This is a breakdown of recent ratings and target prices for iDreamSky Technology and Cheetah Mobile, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
iDreamSky Technology 0 0 0 0 N/A
Cheetah Mobile 0 3 0 0 2.00

Cheetah Mobile has a consensus target price of $11.67, suggesting a potential downside of 25.55%. Given Cheetah Mobile’s higher probable upside, analysts plainly believe Cheetah Mobile is more favorable than iDreamSky Technology.

Summary

Cheetah Mobile beats iDreamSky Technology on 7 of the 8 factors compared between the two stocks.

iDreamSky Technology Company Profile

iDreamSky Technology Limited is a holding company. The Company, through its subsidiaries, and its variable interest entities (VIEs) is principally engaged in the licensing and operating of single player mobile games and mobile online games (the listing business) in the People’s Republic of China. The Company is an independent mobile game publishing platform in China. The Company also operates games as a service, where it offers live game services, engages in live user communications and gains user insights through its multi-dimensional data analysis engine to drive ongoing game optimization and monetization. The Company provides its users with live game services and connects them through friend lists, message boards, leaderboards and user tournaments, enabling in-game interaction and social networking. Its platform offers a range of services, including game redesign and porting, ongoing optimization, marketing, distribution, monetization, payment support and user-related services.

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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