Comparing PubMatic (NASDAQ:PUBM) and DouYu International (NASDAQ:DOYU)

DouYu International (NASDAQ:DOYU) and PubMatic (NASDAQ:PUBM) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.

Institutional and Insider Ownership

17.9% of DouYu International shares are owned by institutional investors. Comparatively, 64.3% of PubMatic shares are owned by institutional investors. 17.3% of DouYu International shares are owned by insiders. Comparatively, 2.9% of PubMatic shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares DouYu International and PubMatic’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DouYu International	$778.94 million	0.47	$5.00 million	($0.38)	-30.34
PubMatic	$267.01 million	3.81	$8.88 million	$0.21	97.15

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

Risk & Volatility

DouYu International has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, PubMatic has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500.

Profitability

This table compares DouYu International and PubMatic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DouYu International	-1.35%	0.62%	0.50%
PubMatic	4.42%	4.21%	1.95%

Analyst Ratings

This is a summary of current ratings and price targets for DouYu International and PubMatic, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DouYu International	1	1	0	0	1.50
PubMatic	0	2	4	0	2.67

DouYu International currently has a consensus target price of $5.50, suggesting a potential downside of 52.30%. PubMatic has a consensus target price of $23.00, suggesting a potential upside of 12.75%. Given PubMatic’s stronger consensus rating and higher probable upside, analysts clearly believe PubMatic is more favorable than DouYu International.

Summary

PubMatic beats DouYu International on 12 of the 14 factors compared between the two stocks.

About DouYu International

DouYu International Holdings Limited, together with its subsidiaries, operates a platform on PC and mobile apps that provides interactive games and entertainment live streaming services in the People's Republic of China. Its platform connects game developers and publishers, professional eSports teams or players and eSports tournament organizers, advertisers, and viewers. The company also sponsors professional players and teams, and organizes eSports tournaments. In addition, it streams other content to include a spectrum of live streaming entertainment options, such as talent shows, music, outdoor, and travel. Further, the company records and offers video clips to allow users to watch replays of selective live streaming content. DouYu International Holdings Limited was founded in 2014 and is headquartered in Wuhan, the People's Republic of China.

About PubMatic

PubMatic, Inc., a technology company, engages in the provision of a cloud infrastructure platform that enables real-time programmatic advertising transactions for digital content creators, advertisers, agencies, agency trading desks, and demand side platforms worldwide. Its PubMatic SSP, a sell-side platform, used for the purchase and sale of digital advertising inventory for publishers and buyers. The company also provides solutions, including OpenWrap, a header bidding solution; Openwrap OTT, a prebid-powered unified bidding solution; Openwrap SDK, an enterprise-grade management tools and analytics; Connect, a solution that provides additional data and insights to publishers and buyers; Activate, which allows buyers to execute direct deals on its platform across publisher inventory; Convert, a commerce media solution; and Identity Hub, an ID management tool for publishers that leverages specialized technology?infrastructure?to simplify the complex alternative identifier marketplace. Its platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. The company was incorporated in 2006 and is based in Redwood City, California.