Weibo (WB) & Tucows (TCX) Critical Survey

Weibo (NASDAQ: WB) and Tucows (NASDAQ:TCX) are both technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Volatility and Risk

Weibo has a beta of 2.52, meaning that its share price is 152% more volatile than the S&P 500. Comparatively, Tucows has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Weibo and Tucows, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Weibo 0 0 7 0 3.00
Tucows 0 0 0 0 N/A

Weibo presently has a consensus target price of $93.86, suggesting a potential downside of 8.01%. Given Weibo’s higher probable upside, equities analysts plainly believe Weibo is more favorable than Tucows.

Profitability

This table compares Weibo and Tucows’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Weibo 26.85% 30.00% 20.97%
Tucows 4.85% 35.17% 5.02%

Earnings and Valuation

This table compares Weibo and Tucows’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Weibo $655.80 million 34.42 $108.02 million $1.17 87.21
Tucows $189.82 million 3.51 $16.06 million $1.30 48.46

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

Insider and Institutional Ownership

22.0% of Weibo shares are owned by institutional investors. Comparatively, 54.7% of Tucows shares are owned by institutional investors. 13.2% of Tucows shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Weibo beats Tucows on 9 of the 13 factors compared between the two stocks.

About Weibo

Weibo Corporation is a social media platform for people to create, distribute and discover Chinese-language content. The Company provides ways for people and organizations to publicly express themselves in real time, interact with others on a global platform and stay connected with the world. It operates in two segments: advertising and marketing services and other services. It offers self-expression products that enable its users to express themselves on its platform; social products to promote social interaction between users on its platform; discovery products to help users discover content on its platform, and notifications to notify users on Weibo account activities through short message service (SMS) or push notification on their device. It offers advertising and marketing solutions to enable its customers to promote their brands and conduct marketing activities. It offers its platform partners with tools and application programming interfaces (APIs).

About Tucows

Tucows Inc. is engaged in providing Internet services. The Company’s segments include Network Access Services and Domain Services. The Network Access Services segment includes mobile, fixed high-speed Internet access services, Internet hosting and network consulting services. The Domain Services segment wholesale and retail domain name registration services, value added services and portfolio services. The Company focuses on serving the needs of this network of resellers by providing services, interfaces, proactive and attentive customer service, reseller-oriented technology and agile design and development processes. The Company focuses its service offerings under brands, including OpenSRS, YummyNames, Platypus, Hover and Ting. As of December 31, 2016, the OpenSRS Domain Service managed 15 million domain names under the Tucows ICANN registrar accreditation and for other registrars. As of December 31, 2016, Ting managed mobile telephony services for approximately 151,000 subscribers.

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