Analyzing The9 (NCTY) and Its Peers

The9 (NASDAQ:NCTY) is one of 958 public companies in the “Software” industry, but how does it weigh in compared to its competitors? We will compare The9 to similar companies based on the strength of its valuation, dividends, profitability, analyst recommendations, institutional ownership, risk and earnings.

Institutional and Insider Ownership

0.5% of The9 shares are held by institutional investors. Comparatively, 42.1% of shares of all “Software” companies are held by institutional investors. 30.8% of The9 shares are held by insiders. Comparatively, 19.8% of shares of all “Software” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for The9 and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The9	1	0	0	0	1.00
The9 Competitors	5502	21132	44135	1451	2.58

As a group, “Software” companies have a potential upside of 289.21%. Given The9’s competitors stronger consensus rating and higher probable upside, analysts plainly believe The9 has less favorable growth aspects than its competitors.

Profitability

This table compares The9 and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The9	N/A	N/A	N/A
The9 Competitors	-629.81%	30.36%	-8.98%

Volatility & Risk

The9 has a beta of 2.09, suggesting that its stock price is 109% more volatile than the S&P 500. Comparatively, The9’s competitors have a beta of 1.19, suggesting that their average stock price is 19% more volatile than the S&P 500.

Earnings and Valuation

This table compares The9 and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
The9	$15.43 million	-$57.55 million	0.70
The9 Competitors	$1.83 billion	$388.38 million	102.49

The9’s competitors have higher revenue and earnings than The9. The9 is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

The9 competitors beat The9 on 9 of the 13 factors compared.

About The9

The9 Limited operates as a cryptocurrency mining business in China, Eastern Europe, Asia, and North America. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was incorporated in 1999 and is headquartered in Shanghai, the People’s Republic of China.