Sito Mobile (SITO) & Cheetah Mobile (CMCM) Critical Analysis

Sito Mobile (NASDAQ: SITO) and Cheetah Mobile (NYSE:CMCM) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Volatility & Risk

Sito Mobile has a beta of -1.24, indicating that its stock price is 224% less volatile than the S&P 500. Comparatively, Cheetah Mobile has a beta of 3.24, indicating that its stock price is 224% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sito Mobile and Cheetah Mobile’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sito Mobile $29.43 million 5.05 -$1.40 million ($0.51) -13.24
Cheetah Mobile $657.45 million 2.43 -$11.59 million $0.36 30.92

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

Analyst Recommendations

This is a summary of recent recommendations for Sito Mobile and Cheetah Mobile, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sito Mobile 0 1 5 0 2.83
Cheetah Mobile 0 3 0 0 2.00

Sito Mobile currently has a consensus target price of $8.80, suggesting a potential upside of 30.37%. Cheetah Mobile has a consensus target price of $11.67, suggesting a potential upside of 4.82%. Given Sito Mobile’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Sito Mobile is more favorable than Cheetah Mobile.

Profitability

This table compares Sito Mobile and Cheetah Mobile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sito Mobile -29.34% -47.82% -25.15%
Cheetah Mobile 7.44% 10.76% 6.35%

Institutional and Insider Ownership

12.5% of Sito Mobile shares are held by institutional investors. Comparatively, 7.2% of Cheetah Mobile shares are held by institutional investors. 6.5% of Sito Mobile shares are held by insiders. Comparatively, 17.1% of Cheetah Mobile shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Cheetah Mobile beats Sito Mobile on 7 of the 13 factors compared between the two stocks.

Sito Mobile Company Profile

SITO Mobile, Ltd. operates a mobile location-based advertising platform serving businesses, advertisers and brands. The Company’s offerings include SITO Location-Based Advertising and SITO Mobile Messaging. SITO Location-Based Advertising delivers display advertisements and videos on behalf of advertisers, including various features, such as Geo-fencing, Verified walk-in, Behavioral Targeting, and Analytics and Optimization. Geo-fencing targets customers within a certain radius of location and uses technology to push coupons, advertisements and promotions to mobile applications. Verified Walk-in tracks foot-traffic to locations and which advertisements drive action. Behavioral Targeting tracks past behaviors over 30 to 90 day increments allowing for real-time campaign management. Analytics and Optimization is a culling and building measurement system. SITO Mobile Messaging is a platform for building and controlling programs, including messaging and customer incentive programs.

Cheetah Mobile Company Profile

Cheetah Mobile Inc. is a holding company. The Company and its consolidated subsidiaries, variable interest entities (VIEs) and a VIE’s subsidiary are engaged in the provision of online marketing services, Internet value-added services, and Internet security services and others. The Company operates a platform that offers mobile and personal computer (PC) applications for its users and global content promotional channels for its customers, both of which are powered by its cloud-based data analytics engines. For its users, its diversified suite of applications optimizes mobile and PC Internet system performance, and provides real time protection against known and unknown security threats. Its data analytics engines perform real time analysis of mobile applications, program files and Websites on their devices for behavior that may impair system performance or impose security risks.

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