Rakuten (OTCMKTS:RKUNY – Get Free Report) and Sohu.com (NASDAQ:SOHU – Get Free Report) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.
Institutional and Insider Ownership
33.0% of Sohu.com shares are owned by institutional investors. 21.1% of Sohu.com shares are owned 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.
Risk and Volatility
Rakuten has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, Sohu.com has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rakuten | $16.70 billion | 0.70 | -$1.19 billion | ($0.54) | -9.93 |
| Sohu.com | $584.33 million | 0.70 | $394.10 million | $14.08 | 1.12 |
Sohu.com has lower revenue, but higher earnings than Rakuten. Rakuten 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 Rakuten and Sohu.com’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rakuten | -7.13% | -14.73% | -0.66% |
| Sohu.com | 67.44% | 20.67% | 13.84% |
Analyst Recommendations
This is a breakdown of current ratings and price targets for Rakuten and Sohu.com, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rakuten | 1 | 0 | 0 | 2 | 3.00 |
| Sohu.com | 0 | 1 | 2 | 0 | 2.67 |
Sohu.com has a consensus price target of $20.00, indicating a potential upside of 27.39%. Given Sohu.com’s higher possible upside, analysts plainly believe Sohu.com is more favorable than Rakuten.
Summary
Sohu.com beats Rakuten on 11 of the 15 factors compared between the two stocks.
About Rakuten
Rakuten Group, Inc. provides services in e-commerce, fintech, digital content, and communications to various users in Japan and internationally. The company operates through three segments: Internet Services, FinTech, and Mobile. The Internet Services segment provides range of e-commerce sites, such as Rakuten Ichiba, an Internet shopping mall, online cash-back sites, travel booking sites, portal sites, and digital content sites. It also offers messaging services and sells advertising; and manages professional sport teams. The FinTech segment offers financial services over the internet related to banking and securities, credit cards, life insurance, general insurance, electronic payment business, crypto asset (virtual currency) spot transaction, etc. The Mobile segment provides communication services and technology, electricity supply, and digital content site services. The company was formerly known as Rakuten, Inc. and changed its name to Rakuten Group, Inc. in April 2021. Rakuten Group, Inc. was incorporated in 1997 and is headquartered in Setagaya, Japan.
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.
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