Progress Software (PRGS) versus Cheetah Mobile (CMCM) Critical Survey

Progress Software (NASDAQ: PRGS) and Cheetah Mobile (NYSE:CMCM) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.

Analyst Recommendations

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This is a breakdown of recent ratings for Progress Software and Cheetah Mobile, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Progress Software 1 1 1 0 2.00
Cheetah Mobile 1 3 0 0 1.75

Progress Software currently has a consensus price target of $44.50, suggesting a potential upside of 17.35%. Cheetah Mobile has a consensus price target of $12.33, suggesting a potential downside of 0.05%. Given Progress Software’s stronger consensus rating and higher probable upside, research analysts plainly believe Progress Software is more favorable than Cheetah Mobile.

Dividends

Progress Software pays an annual dividend of $0.56 per share and has a dividend yield of 1.5%. Cheetah Mobile does not pay a dividend. Progress Software pays out 32.6% of its earnings in the form of a dividend.

Risk & Volatility

Progress Software has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Cheetah Mobile has a beta of 3.46, suggesting that its share price is 246% more volatile than the S&P 500.

Valuation and Earnings

This table compares Progress Software and Cheetah Mobile’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Progress Software $397.57 million 4.31 $37.41 million $1.72 22.05
Cheetah Mobile $764.61 million 2.32 $207.21 million N/A N/A

Cheetah Mobile has higher revenue and earnings than Progress Software.

Profitability

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

Net Margins Return on Equity Return on Assets
Progress Software 12.69% 23.37% 12.30%
Cheetah Mobile 27.66% 37.29% 22.27%

Insider & Institutional Ownership

94.4% of Progress Software shares are owned by institutional investors. Comparatively, 5.9% of Cheetah Mobile shares are owned by institutional investors. 2.5% of Progress Software shares are owned by company insiders. Comparatively, 17.1% of Cheetah Mobile shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Cheetah Mobile beats Progress Software on 8 of the 15 factors compared between the two stocks.

Progress Software Company Profile

Progress Software Corporation is engaged in application development. The Company operates through three segments: OpenEdge, Data Connectivity and Integration (DCI), and Application Development and Deployment (AppDev). The OpenEdge business segment provides the product enhancements and marketing support to its partner base. It is also focused on providing partners and direct end users with a path to develop and integrate cloud-based applications. Its solutions include Progress OpenEdge and Progress Corticon. The DCI segment is focused on its data assets, including the data integration components of its cloud offerings. Its solutions include Progress DataDirect Connect and Progress DataDirect Cloud. The AppDev business segment is focused on generating customers for its application development assets. Its solutions include Dev Tools, NativeScript, Dev Cloud, Telerik Platform, Test Studio, Sitefinity and Progress Rollbase. Its offerings span Web, mobile and data.

Cheetah Mobile Company Profile

Cheetah Mobile Inc. operates a platform that offers mobile and personal computer (PC) applications for its users and global content promotional channels. The company's suite of utility applications optimizes mobile and PC Internet system performance and provides real time protection against known and unknown security threats. Its mobile and PC applications for users include Clean Master, a junk file cleaning, memory boosting, and privacy protection tool for mobile devices; CM Security, an anti-virus and security application for mobile devices; Battery Doctor, a power optimization tool for mobile devices; Cheetah Browser, a safe Web browser for PCs and mobile devices; CM Browser, a mobile browser; CM Launcher, a secure launcher that offers acceleration, secure protection, and stylish wallpapers, as well as automatically organizes mobile applications based on personal behavior; Photo Grid, a photo collage application that allows users to create professional looking collages of photos through an intuitive interface for mobile devices; CM Locker, a lightweight lock screen; and Duba Anti-virus, an Internet security application for PC and mobile devices. The company also offers content-driven applications comprising Live.me, a live video streaming application; and News Republic, a global mobile news service operator, as well as various products, which include mobile advertising publishing; mobile advertising platform; Duba.com personal start page that aggregates online resources and provides users access to their online destinations; Web and mobile games publishing; and cloud-based data analytics engines. It serves direct advertisers, including mobile application developers, mobile game developers, and e-commerce companies, as well as search engines. The company was formerly known as Kingsoft Internet Software Holdings Limited and changed its name to Cheetah Mobile Inc. in March 2014. Cheetah Mobile Inc. was incorporated in 2009 and is headquartered in Beijing, China.

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