Critical Analysis: Roku (NASDAQ:ROKU) & HUYA (NYSE:HUYA)

HUYA (NYSE:HUYA) and Roku (NASDAQ:ROKU) are both communication services companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Profitability

This table compares HUYA and Roku’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HUYA	-1.59%	0.20%	0.14%
Roku	6.82%	13.73%	8.34%

Analyst Ratings

This is a summary of recent ratings and recommmendations for HUYA and Roku, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HUYA	1	1	1	1	2.50
Roku	0	19	7	1	2.33

HUYA currently has a consensus price target of $3.45, indicating a potential upside of 52.32%. Roku has a consensus price target of $156.17, indicating a potential downside of 1.02%. Given HUYA’s stronger consensus rating and higher probable upside, analysts clearly believe HUYA is more favorable than Roku.

Earnings and Valuation

This table compares HUYA and Roku”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HUYA	$929.83 million	0.54	-$16.10 million	($0.06)	-37.75
Roku	$4.74 billion	4.94	$88.36 million	$2.34	67.43

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

Institutional & Insider Ownership

23.2% of HUYA shares are held by institutional investors. Comparatively, 86.3% of Roku shares are held by institutional investors. 1.2% of HUYA shares are held by company insiders. Comparatively, 13.4% of Roku shares are held 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.

Risk & Volatility

HUYA has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Roku has a beta of 2.01, meaning that its stock price is 101% more volatile than the S&P 500.

Summary

Roku beats HUYA on 12 of the 14 factors compared between the two stocks.

About HUYA

HUYA Inc., together with its subsidiaries, operates game live streaming platforms in the People's Republic of China. Its platforms enable broadcasters and viewers to interact during live streaming. The company's live streaming content also covers other entertainment content, such as talent shows, anime, outdoor activities, live chats, and other genres. In addition, it operates Nimo TV, a game live streaming platform in international markets. Further, the company provides online advertising, cnt, internet value added, and cultural and creative services. The company was founded in 2014 and is headquartered in Guangzhou, China. HUYA Inc. is a subsidiary of Tencent Holdings Limited.

About Roku

Roku, Inc., together with its subsidiaries, operates a TV streaming platform in the United states and internationally. The company operates in two segments, Platform and Devices. Its streaming platform allows users to find and access TV shows, movies, news, sports, and others. The Platform segment offers digital advertising, including direct and programmatic video advertising, media and entertainment promotional spending, and related services; and streaming services distribution, such as subscription and transaction revenue shares, and sale of premium subscriptions and branded app buttons on remote controls. The Devices segment provides sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories as well as licensing arrangements with service operators. Roku, Inc. was incorporated in 2002 and is headquartered in San Jose, California.