Comparing Cango (NYSE:CANG) & Rakuten (OTCMKTS:RKUNY)

Rakuten (OTCMKTS:RKUNY) and Cango (NYSE:CANG) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Volatility and Risk

Rakuten has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, Cango has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Earnings and Valuation

This table compares Rakuten and Cango”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rakuten	$16.70 billion	0.60	-$1.19 billion	($0.37)	-12.35
Cango	$688.08 million	0.06	-$621.95 million	($3.56)	-0.06

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Rakuten and Cango, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rakuten	0	1	0	1	3.00
Cango	2	0	1	1	2.25

Cango has a consensus target price of $3.00, indicating a potential upside of 1,293.40%. Given Cango’s higher probable upside, analysts clearly believe Cango is more favorable than Rakuten.

Institutional and Insider Ownership

4.2% of Cango shares are held by institutional investors. 29.1% of Cango shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Rakuten and Cango’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rakuten	-4.83%	-10.02%	-0.44%
Cango	-125.53%	-105.01%	-51.46%

Summary

Rakuten beats Cango on 8 of the 14 factors compared between the two stocks.

About Rakuten

Rakuten Group, Inc. provides services in e-commerce, fintech, digital content, and communications to various users in Japan and internationally. The company operates through three segments: Internet Services, FinTech, and Mobile. The Internet Services segment provides range of e-commerce sites, such as Rakuten Ichiba, an Internet shopping mall, online cash-back sites, travel booking sites, portal sites, and digital content sites. It also offers messaging services and sells advertising; and manages professional sport teams. The FinTech segment offers financial services over the internet related to banking and securities, credit cards, life insurance, general insurance, electronic payment business, crypto asset (virtual currency) spot transaction, etc. The Mobile segment provides communication services and technology, electricity supply, and digital content site services. The company was formerly known as Rakuten, Inc. and changed its name to Rakuten Group, Inc. in April 2021. Rakuten Group, Inc. was incorporated in 1997 and is headquartered in Setagaya, Japan.

About Cango

Cango Inc. operates an automotive transaction service platform that connects dealers, original equipment manufacturers, financial institutions, car buyers, insurance brokers, and companies in the People's Republic of China. The company offers automobile trading solutions comprising car sourcing, transaction facilitation, logistics, and warehousing support for dealers through Cango Haoche app that offers new car transaction services, and Cango U-Car app that offers used-car transaction services. It also provides automotive financing facilitation services that include facilitating financing transactions from financial institutions to car buyers, which comprises credit origination, credit assessment, credit servicing, and delinquent asset management services; facilitating financing transactions of car purchases for car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People's Republic of China.