Zscaler (NASDAQ:ZS) and Sogou (NYSE:SOGO) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.
This table compares Zscaler and Sogou’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent recommendations for Zscaler and Sogou, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Zscaler currently has a consensus target price of $36.88, suggesting a potential downside of 9.42%. Sogou has a consensus target price of $12.83, suggesting a potential upside of 123.19%. Given Sogou’s higher probable upside, analysts clearly believe Sogou is more favorable than Zscaler.
Institutional and Insider Ownership
23.1% of Zscaler shares are held by institutional investors. Comparatively, 5.6% of Sogou shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Zscaler and Sogou’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Zscaler||$190.17 million||25.64||-$33.64 million||($0.31)||-131.32|
|Sogou||$908.36 million||2.51||$82.20 million||$0.29||19.83|
Sogou has higher revenue and earnings than Zscaler. Zscaler is trading at a lower price-to-earnings ratio than Sogou, indicating that it is currently the more affordable of the two stocks.
Sogou beats Zscaler on 8 of the 13 factors compared between the two stocks.
Zscaler, Inc. operates as a cloud security company worldwide. The company's flagship services include Zscaler Internet Access solution that connect users to externally managed applications, including software-as-a-service applications and Internet destinations; and Zscaler Private Access solution, which is designed to provide access to internally managed applications, either hosted internally in data centers, and private or public clouds. It serves customers in various industries, such as airlines and transportation, conglomerates, consumer goods and retail, financial services, healthcare, manufacturing, media and communications, public sector and education, technology, and telecommunications services. The company was formerly known as SafeChannel, Inc., and changed its name to Zscaler, Inc. in August 2008. Zscaler, Inc. was incorporated in 2007 and is headquartered in San Jose, California.
Sogou Inc. provides search and search-related services in the People's Republic of China. The company provides Sogou Search, a search engine; and Sogou Input Method, a Chinese language input software for mobile and PC MAUs. It also offers search and search-related advertising services; Internet value-added services related to the operation of Web games and mobile games developed by third parties; and online reading services, as well as other products and services, including smart hardware products. The company was incorporated in 2005 and is based in Beijing, the People's Republic of China. Sogou Inc. is a subsidiary of Sohu.com Inc.
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