Financial Review: DouYu International (NASDAQ:DOYU) versus Playtika (NASDAQ:PLTK)

DouYu International (NASDAQ:DOYU) and Playtika (NASDAQ:PLTK) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Volatility & Risk

DouYu International has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Playtika has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Valuation & Earnings

This table compares DouYu International and Playtika”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DouYu International	$546.09 million	0.26	-$4.16 million	($0.13)	-36.15
Playtika	$2.76 billion	0.48	-$206.40 million	($0.77)	-4.48

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for DouYu International and Playtika, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DouYu International	1	1	0	0	1.50
Playtika	1	3	1	0	2.00

DouYu International presently has a consensus target price of $7.00, suggesting a potential upside of 48.94%. Playtika has a consensus target price of $4.10, suggesting a potential upside of 18.84%. Given DouYu International’s higher probable upside, equities analysts clearly believe DouYu International is more favorable than Playtika.

Institutional & Insider Ownership

17.9% of DouYu International shares are held by institutional investors. Comparatively, 11.9% of Playtika shares are held by institutional investors. 17.3% of DouYu International shares are held by company insiders. Comparatively, 5.7% of Playtika shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares DouYu International and Playtika’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DouYu International	-0.73%	2.04%	1.29%
Playtika	-10.54%	-67.46%	4.75%

About DouYu International

DouYu International Holdings Limited, together with its subsidiaries, operates a platform on PC and mobile apps that provides interactive games and entertainment live streaming services in the People’s Republic of China. Its platform connects game developers and publishers, professional eSports teams or players and eSports tournament organizers, advertisers, and viewers. The company also sponsors professional players and teams, as well as organizes eSports tournaments. In addition, it streams other content to include a spectrum of live streaming entertainment options, such as talent shows, music, outdoor, and travel. Further, the company records and offers video clips to allow users to watch replays of selective live streaming content; and graphics that include game guides, tutorials, news, and other types of content. DouYu International Holdings Limited was founded in 2014 and is headquartered in Wuhan, the People’s Republic of China.

About Playtika

Playtika Holding Corp., together with its subsidiaries, develops mobile games in the United States, Europe, Middle East, Africa, Asia pacific, and internationally. The company owns a portfolio of casual and social casino-themed games. It distributes its games to the end customer through various web and mobile platforms and direct-to-consumer platforms. Playtika Holding Corp. was founded in 2010 and is headquartered in Herzliya Pituach, Israel. Playtika Holding Corp. is a subsidiary of Playtika Holding UK II Limited.