Sunlands Technology Group (NYSE:STG) and GigaMedia (NASDAQ:GIGM) Critical Analysis

Sunlands Technology Group (NYSE:STG) and GigaMedia (NASDAQ:GIGM) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.

Analyst Ratings

This is a summary of current ratings for Sunlands Technology Group and GigaMedia, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunlands Technology Group	1	0	0	0	1.00
GigaMedia	1	0	0	0	1.00

Risk and Volatility

Sunlands Technology Group has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, GigaMedia has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Profitability

This table compares Sunlands Technology Group and GigaMedia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunlands Technology Group	18.56%	39.98%	17.58%
GigaMedia	-50.86%	-4.52%	-4.24%

Earnings and Valuation

This table compares Sunlands Technology Group and GigaMedia”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunlands Technology Group	$288.84 million	0.18	$52.28 million	$3.86	1.00
GigaMedia	$3.47 million	4.42	-$1.55 million	($0.15)	-9.25

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

Insider & Institutional Ownership

26.4% of Sunlands Technology Group shares are held by institutional investors. Comparatively, 13.5% of GigaMedia shares are held by institutional investors. 59.7% of Sunlands Technology Group shares are held by insiders. Comparatively, 1.0% of GigaMedia shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Sunlands Technology Group beats GigaMedia on 10 of the 11 factors compared between the two stocks.

About Sunlands Technology Group

Sunlands Technology Group, through its subsidiaries, provides online education services through online and mobile platforms in the People's Republic of China. It offers various degree- and diploma-oriented post-secondary courses, including preparation courses for the self-taught higher education examination (STE) for learners pursuing associate diplomas or bachelor's degrees, as well as for the entrance examinations of Master of Business Administration programs. The company's STE courses include Chinese language and literature, law, pre-school education, marketing, English, human resource management, business administration, business management, modern corporate governance, financial management, advertising, accounting, administrative management, computer information management, finance, chain operation management, and visual communication and design and production. It also provides professional certification preparation courses in various industries and professions, such as accounting, human resources, teaching, and finance. In addition, the company offers education services through online and mobile platforms to adult students, pursuing post-secondary, and professional educations. The company was formerly known as Sunlands Online Education Group and changed its name to Sunlands Technology Group in August 2018. Sunlands Technology Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.

About GigaMedia

GigaMedia Limited, together with its subsidiaries, provides digital entertainment services in Taiwan, Hong Kong, and Macau. The company owns and operates FunTown, a digital entertainment portal that offers mobile and browser-based casual games, as well as provides services such as player clubs, tournaments, avatars, friends and family messenger and online chatting systems, customer service, mobile platform, and customer platform. It also offers MahJong, a traditional Chinese tile-based game; casual card and table games; online card games; and chance-based games, including bingo, lotto, horse racing, Sic-Bo, slots, and other casual games. In addition, the company provides role-playing and sports games, such as Tales Runner, a multi-player online obstacle running game; Yume 100, a story-based game that targets female players; Akaseka, a female-oriented game; and Shinobi Master New Link, a male-oriented game. GigaMedia Limited was founded in 1998 and is headquartered in Taipei, Taiwan.