Reviewing HUYA (NYSE:HUYA) and Switch (NYSE:SWCH)

HUYA (NYSE:HUYA) and Switch (NYSE:SWCH) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.

Analyst Recommendations

This is a summary of recent recommendations for HUYA and Switch, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HUYA 0 0 11 0 3.00
Switch 0 4 6 0 2.60

HUYA currently has a consensus target price of $28.27, suggesting a potential upside of 30.49%. Switch has a consensus target price of $12.78, suggesting a potential downside of 3.20%. Given HUYA’s stronger consensus rating and higher possible upside, equities research analysts plainly believe HUYA is more favorable than Switch.

Institutional and Insider Ownership

15.9% of HUYA shares are owned by institutional investors. Comparatively, 20.3% of Switch shares are owned by institutional investors. 28.4% of Switch shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

HUYA has a beta of 2.14, indicating that its share price is 114% more volatile than the S&P 500. Comparatively, Switch has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Dividends

Switch pays an annual dividend of $0.12 per share and has a dividend yield of 0.9%. HUYA does not pay a dividend. Switch pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares HUYA and Switch’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HUYA $678.27 million 6.44 -$281.83 million $0.10 216.60
Switch $405.86 million 8.03 $4.05 million $0.09 146.67

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

Profitability

This table compares HUYA and Switch’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HUYA -35.91% 4.60% 3.70%
Switch 0.98% 1.27% 0.62%

Summary

HUYA beats Switch on 10 of the 16 factors compared between the two stocks.

About HUYA

HUYA Inc., through its subsidiaries, operates game live streaming platforms in the People's Republic of China. Its platforms enable broadcasters and viewers to interact during live streaming. The company also provides advertising and online game-related services. As of December 31, 2017, its live streaming content covered approximately 2,600 games, including mobile, PC, and console games. The company was founded in 2014 and is based in Guangzhou, China. HUYA Inc. is a subsidiary of YY Inc.

About Switch

Switch, Inc., through its subsidiary, Switch, Ltd., provides colocation space and related services primarily to technology and digital media companies in the United States. It develops and operates data centers in Nevada and Michigan. The company also serves cloud and managed service providers, financial institutions, IT and software providers, government agencies, network and telecommunications providers, and others that conduct critical business on the Internet. Switch, Inc. was founded in 2000 and is headquartered in Las Vegas, Nevada.

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