Reviewing Changyou (CYOU) and Its Rivals

Changyou (NASDAQ: CYOU) is one of 184 public companies in the “Prepackaged software” industry, but how does it contrast to its rivals? We will compare Changyou to related businesses based on the strength of its analyst recommendations, dividends, institutional ownership, risk, profitability, earnings and valuation.

Risk and Volatility

Changyou has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, Changyou’s rivals have a beta of -16.78, indicating that their average stock price is 1,778% less volatile than the S&P 500.

Insider & Institutional Ownership

33.4% of Changyou shares are owned by institutional investors. Comparatively, 58.5% of shares of all “Prepackaged software” companies are owned by institutional investors. 21.0% of shares of all “Prepackaged software” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Changyou and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Changyou $580.26 million $108.83 million 9.36
Changyou Competitors $1.68 billion $253.91 million -15.99

Changyou’s rivals have higher revenue and earnings than Changyou. Changyou is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of current ratings for Changyou and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Changyou 3 2 0 0 1.40
Changyou Competitors 1105 5706 11779 483 2.61

Changyou currently has a consensus target price of $32.58, indicating a potential upside of 70.55%. As a group, “Prepackaged software” companies have a potential upside of 0.61%. Given Changyou’s higher probable upside, equities research analysts plainly believe Changyou is more favorable than its rivals.

Profitability

This table compares Changyou and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Changyou 11.01% 5.07% 3.45%
Changyou Competitors -6.07% -78.13% -1.71%

Summary

Changyou rivals beat Changyou on 7 of the 13 factors compared.

About Changyou

Changyou.com Limited develops and operates online games in the People's Republic of China. The company operates through Online Game, Platform Channel, and Others segments. It develops, operates, and licenses online games, including interactive online games that are accessed and played simultaneously by various game players through personal computers; and mobile games played on mobile devices. The company also operates 17173.com Website, an information portal that provides news, electronic forums, online videos, and other information services on online games to game players; and offers various software applications for PCs and mobile devices, as well as purchases pre-film cinema advertising slots from movie theater operators for advertisers. As of December 31, 2017, it had approximately 5.5 million total average monthly active accounts; and 2.0 million total active paying accounts. The company was founded in 2003 and is headquartered in Beijing, the People's Republic of China. Changyou.com Limited is a subsidiary of Sohu.com Inc.

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