Comparing LivePerson (NASDAQ:LPSN) and Sohu.com (NASDAQ:SOHU)

LivePerson (NASDAQ:LPSN) and Sohu.com (NASDAQ:SOHU) are both small-cap computer and technology 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

LivePerson has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500. Comparatively, Sohu.com has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LivePerson	-38.62%	-190.60%	-5.01%
Sohu.com	17.97%	-7.86%	-4.44%

Institutional & Insider Ownership

79.8% of LivePerson shares are held by institutional investors. Comparatively, 33.0% of Sohu.com shares are held by institutional investors. 2.0% of LivePerson 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, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for LivePerson and Sohu.com, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LivePerson	1	2	0	0	1.67
Sohu.com	0	0	0	0	0.00

LivePerson presently has a consensus target price of $1.00, suggesting a potential upside of 18.46%. Given LivePerson’s stronger consensus rating and higher probable upside, equities analysts clearly believe LivePerson is more favorable than Sohu.com.

Earnings and Valuation

This table compares LivePerson and Sohu.com”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LivePerson	$312.47 million	0.25	-$134.27 million	($2.16)	-0.39
Sohu.com	$598.40 million	0.66	-$100.27 million	$3.70	3.54

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

Summary

Sohu.com beats LivePerson on 9 of the 13 factors compared between the two stocks.

About LivePerson

LivePerson, Inc. engages in conversational artificial intelligence. It enables brands to leverage the Conversational Cloud's intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The company offers the Conversational Cloud, an enterprise-class digital customer conversation platform, which enables businesses and consumers to connect through conversational channels, such as voice, in-app, and mobile messaging. It also provides professional services; LivePerson's Conversational AI, including conversation builder, manager, and intelligence, and intent manager. In addition, it provides Voice AI, conversational intelligence and insights, and integration services. The company sells its products to Fortune 500 companies, Internet businesses, online merchants, automotive dealers, educational institution, public sector, and not-for-profit organizations. It operates in the United States, Canada, Latin America, South America, Europe, the Middle East, Africa, the United Kingdom, and the Asia-Pacific. LivePerson, Inc. was incorporated in 1995 and is headquartered in New York, New York.

About Sohu.com

Sohu.com Limited engages in the provision of online media, video, and game products and services on personal computers (PCs) and mobile devices in China. It operates through two segments: Sohu and Changyou. The company offers online news, information, and content services through the mobile phone application Sohu News APP, mobile portal m.sohu.com, and www.sohu.com for PCs; and online video content and services through mobile phone application Sohu Video APP and tv.sohu.com, as well as ifox, a video application for PC. It also operates Focus (www.focus.cn), which provides online real estate information and services; and 17173.com website, which provides news, electronic forums, online videos, and other online game information services to game players, as well as offers mobile game distribution services. In addition, the company offers interactive online games for PCs and mobile devices. Further, it provides paid subscription and interactive broadcasting services. The company was incorporated in 1996 and is headquartered in Beijing, China.