Proofpoint (NASDAQ:PFPT) versus Sohu.com (NASDAQ:SOHU) Critical Contrast

Proofpoint (NASDAQ:PFPT) and Sohu.com (NASDAQ:SOHU) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for Proofpoint and Sohu.com, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Proofpoint 0 3 19 0 2.86
Sohu.com 0 1 0 0 2.00

Proofpoint presently has a consensus price target of $142.59, suggesting a potential upside of 23.70%. Sohu.com has a consensus price target of $11.30, suggesting a potential upside of 13.34%. Given Proofpoint’s stronger consensus rating and higher probable upside, analysts plainly believe Proofpoint is more favorable than Sohu.com.

Volatility and Risk

Proofpoint has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500. Comparatively, Sohu.com has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500.

Institutional & Insider Ownership

98.1% of Proofpoint shares are held by institutional investors. Comparatively, 54.9% of Sohu.com shares are held by institutional investors. 2.9% of Proofpoint shares are held by company insiders. Comparatively, 21.1% of Sohu.com shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Proofpoint and Sohu.com’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Proofpoint $716.99 million 9.01 -$103.75 million ($1.15) -100.23
Sohu.com $1.88 billion 0.21 -$160.08 million ($4.13) -2.41

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

Profitability

This table compares Proofpoint and Sohu.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Proofpoint -14.56% -10.85% -3.86%
Sohu.com -6.29% -8.16% -3.85%

Summary

Proofpoint beats Sohu.com on 8 of the 14 factors compared between the two stocks.

About Proofpoint

Proofpoint, Inc. operates as a security-as-a-service provider that enables large and mid-sized organizations to defend, protect, archive, and govern their sensitive data worldwide. It offers protection against advanced and targeted threats, including malicious attachments, polymorphic threats, zero-day exploits, user-transparent ‘drive-by' downloads, malicious Web links, hybrid threats, malware free attacks, and other penetration tactics. The company also provides integrated email security, advanced threat, information protection and archiving, and digital risk protection product services. In addition, it offers solutions that enable secure business-to-business and business-to-consumer communications; email encryption services that encrypt sensitive emails and deliver them to PC or mobile device; file-transfer solutions for end-users to share various forms of documents and other content; security optimized cloud architecture solutions; and extensible security-as-a-service platform. The company serves aerospace and defense, education, financial services, government, healthcare, manufacturing, and retail sectors. Proofpoint, Inc. was founded in 2002 and is headquartered in Sunnyvale, California.

About Sohu.com

Sohu.com Limited provides online media, search, and game services on personal computers (PCs) and mobile devices in the People's Republic of China. The company provides online news and information through a mobile phone application, Sohu News APP; sohu.com for PCs; and m.sohu.com mobile portal, as well as online video content and service through tv.sohu.com for PCs, as well as Sohu Video APP mobile phone application. It also operates focus.cn, which provides online real estate information and services; and offers paid subscription services, interactive broadcasting services, and content through various platforms. In addition, the company operates Sogou Search, which makes information accessible for Chinese Internet users; Sogou Input Method, a cloud-based Chinese language input software; Sogou Browser for Web navigation; Sogou Web Directory, a content aggregation and distribution platform; and Sogou Translation to deliver language translation, as well as offers auction-based pay-for-click services for advertisers. Further, it offers Internet value-added services, including the operation of Web and mobile games developed by third parties; online reading services and smart hardware products; online games; and cinema advertising services. Additionally, the company operates 17173.com Website, a game information portal; and RaidCall, which provides online music and entertainment services. Sohu.com Inc. was founded in 1996 and is headquartered in Beijing, the People's Republic of China.

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