Analyzing Discovery (DISCB) and Gaia (GAIA)

Discovery (NASDAQ: DISCB) and Gaia (NASDAQ:GAIA) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

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This is a summary of recent ratings and recommmendations for Discovery and Gaia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Discovery 0 0 0 0 N/A
Gaia 0 0 3 0 3.00

Gaia has a consensus price target of $21.67, indicating a potential upside of 38.45%. Given Gaia’s higher possible upside, analysts clearly believe Gaia is more favorable than Discovery.

Insider & Institutional Ownership

0.0% of Discovery shares are owned by institutional investors. Comparatively, 29.1% of Gaia shares are owned by institutional investors. 43.4% of Gaia shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Discovery and Gaia’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Discovery $6.87 billion 1.92 -$337.00 million N/A N/A
Gaia $28.29 million 9.68 -$23.27 million ($1.57) -9.97

Gaia has lower revenue, but higher earnings than Discovery.

Volatility and Risk

Discovery has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Gaia has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Profitability

This table compares Discovery and Gaia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Discovery -4.90% 21.68% 5.92%
Gaia -82.26% -28.29% -24.84%

Summary

Gaia beats Discovery on 6 of the 11 factors compared between the two stocks.

Discovery Company Profile

Discovery Communications, Inc. (Discovery) is a global media company. The Company provides content across multiple distribution platforms, including pay-television (pay-TV), free-to-air (FTA) and broadcast television, Websites, digital distribution arrangements and content licensing agreements. Its segments include U.S. Networks, which consists principally of domestic television networks and digital content services; International Networks, consisting primarily of international television networks and digital content services, and Education and Other, which consists principally of curriculum-based product and service offerings, and production studios. The Company’s portfolio of networks includes television brands, such as Discovery Channel, Animal Planet, ID, Velocity (known as Turbo outside of the United States) and Eurosport. It is also engaged in extending content distribution across various platforms, including brand-aligned Websites, Web-native networks and online streaming.

Gaia Company Profile

Gaia, Inc. operates a digital video subscription service and online community that caters underserved subscribers worldwide. The company has a digital content library of approximately 8,000 titles available to its subscribers on Internet-connected devices. Its subscribers have access to a library of films, documentaries, interviews, yoga classes, transformation related content, and others for digital streaming. The company's content on its network is curated into three channels, including Yoga, Transformation, and Seeking Truth; and delivered directly to subscribers through its streaming platform. It complements its produced and owned content through long term, predominately exclusive, and licensing agreements. The company was formerly known as Gaiam, Inc. and changed its name to Gaia, Inc. in July 2016. Gaia, Inc. was founded in 1988 and is based in Louisville, Colorado.

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