Financial Analysis: Autohome (ATHM) and Renren (RENN)

Autohome (NYSE: RENN) and Renren (NYSE:RENN) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for Autohome and Renren, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Autohome 0 0 5 0 3.00
Renren 0 0 0 0 N/A

Autohome currently has a consensus price target of $74.95, indicating a potential downside of 11.03%. Given Autohome’s higher possible upside, research analysts plainly believe Autohome is more favorable than Renren.

Volatility & Risk

Autohome has a beta of 2.07, indicating that its stock price is 107% more volatile than the S&P 500. Comparatively, Renren has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Insider & Institutional Ownership

44.5% of Autohome shares are held by institutional investors. Comparatively, 3.4% of Renren shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Autohome and Renren’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Autohome 36.15% 27.64% 19.26%
Renren -42.22% -17.68% -10.73%

Earnings & Valuation

This table compares Autohome and Renren’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Autohome $954.49 million 10.43 $307.64 million $2.63 32.03
Renren $202.10 million 0.61 -$110.42 million ($1.61) -1.11

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

Summary

Autohome beats Renren on 12 of the 12 factors compared between the two stocks.

About Autohome

Autohome Inc. operates as an online destination for automobile consumers in the People's Republic of China. The company, through its Websites, autohome.com.cn and che168.com, delivers comprehensive, independent, and interactive content to automobile buyers and owners, including company generated content, such as automobile-related articles and reviews, pricing trends in various local markets, photographs, video clips, and live streaming; automobile library, which comprises a range of specifications covering performance levels, dimensions, powertrains, vehicle bodies, interiors, safety, entertainment systems, and other features, as well as manufacturers' suggested retail prices; new and used automobile listings, and promotional information; and user generated content and forums. It also offers advertising services for automakers and dealers; dealer subscription services that allow dealers to market their inventory and services through its Websites and mobile applications; and used automobile listings services, which allow used automobile dealers and individuals to market their automobiles for sale on its Websites. In addition, Autohome Inc. operates Autohome Mall, an online transaction platform that facilitates direct vehicle sales and commission-based services; provides iOS- and Android-based applications to allow its users to access its content; and offers technical support and management consulting services. The company was formerly known as Sequel Limited and changed its name to Autohome Inc. in October 2011. Autohome Inc. was founded in 2008 and is headquartered in Beijing, the People's Republic of China. Autohome Inc. is a subsidiary of Yun Chen Capital Cayman.

About Renren

Renren Inc. operates a social networking Internet platform in the People's Republic of China. It operates through two segments, Renren and Auto Group. The company operates Renren.com and Renren Mobile App that enable users to communicate and stay connected with friends, classmates, family members, and co-workers; and woxiu.com, a PC-based social video platform for users to stream their performances live to viewers. The company also sells used automobiles and related products; arranges financing options for customers through its financial services partners; provides credit financing for used automobile dealerships; and sells new cars, as well as provides value-added services, such as warranties, insurance, and after-sale products and services. It offers vehicles at its in-store showrooms; and through Kaixin Auto app, as well as through other online vertical channels, such as Autohome and 58.com. In addition, the company develops Chime, a software as a solution platform that offers lead generation and customer relationship management solutions for real estate professionals; and provides customizable lead capture landing pages that offer multiple home value estimates in the United States. Further, it provides online and mobile services for the trucking industry in the United States. The company was formerly known as Oak Pacific Interactive and changed its name to Renren Inc. in December 2010. Renren Inc. was founded in 2002 and is headquartered in Beijing, the People's Republic of China.

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