Analyzing Yalla Group (NYSE:YALA) and Weibo (NASDAQ:WB)

Weibo (NASDAQ:WB) and Yalla Group (NYSE:YALA) are both small-cap communication services companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Valuation & Earnings

This table compares Weibo and Yalla Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Weibo	$1.76 billion	0.91	$449.02 million	$1.21	5.40
Yalla Group	$341.94 million	2.48	$149.84 million	$0.77	7.21

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

Volatility & Risk

Weibo has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500. Comparatively, Yalla Group has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.

Institutional and Insider Ownership

68.8% of Weibo shares are held by institutional investors. Comparatively, 4.7% of Yalla Group shares are held by institutional investors. 41.3% of Weibo shares are held by company insiders. Comparatively, 52.2% of Yalla Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Weibo and Yalla Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Weibo	2	3	1	0	1.83
Yalla Group	0	1	0	0	2.00

Weibo presently has a consensus target price of $8.10, suggesting a potential upside of 24.04%. Given Weibo’s higher possible upside, equities research analysts clearly believe Weibo is more favorable than Yalla Group.

Profitability

This table compares Weibo and Yalla Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Weibo	17.78%	8.87%	4.96%
Yalla Group	40.78%	16.82%	15.14%

Summary

Yalla Group beats Weibo on 8 of the 14 factors compared between the two stocks.

About Weibo

Weibo Corporation, through its subsidiaries, operates as a social media platform for people to create, discover, and distribute content in the People’s Republic of China. It operates in two segments, Advertising and Marketing Services; and Value-Added Services. The company offers discovery products to help users discover content on its platform; self-expression products that enable its users to express themselves on its platform; and social products to promote social interaction between users on its platform. It also provides advertising and marketing solutions, such as social display advertisements; and promoted marketing offerings, such as Fans Headline and Weibo Express promoted feeds, as well as promoted trends and search products that appear alongside user’s trends discovery and search behaviors. In addition, the company offers products, such as trends, search, video/live streaming, and editing tools; content customization, copyright contents pooling, and user interaction development; and search list recommendation, trends list recommendation, and Weibo app opening advertisements. Further, it provides back-end management, traffic support, and product services for better displaying and promotion of its account and content; open application platform for other app developers that allows users to log into third-party applications with their Weibo account for sharing third-party content on its platform; and Weibo Wallet, a product that enables platform partners to conduct interest generation activities on Weibo, such as handing out red envelops and coupons. The company was formerly known as T.CN Corporation and changed its name to Weibo Corporation in 2012. The company was founded in 2009 and is headquartered in Beijing, the People’s Republic of China.

About Yalla Group

Yalla Group Limited operates a social networking and gaming platform primarily in the Middle East and North Africa region. It provides mobile applications, including Yalla, a voice-centric group chat platform; and Yalla Ludo, a casual gaming application. The company’s platform offers group chatting and games services; and sells virtual items, as well as provides upgrade services. The company was formerly known as FYXTech Corporation. Yalla Group Limited was founded in 2016 and is headquartered in Dubai, the United Arab Emirates.