The9 (NCTY) & Its Competitors Critical Analysis

The9 (NASDAQ:NCTY) is one of 956 public companies in the “Software” industry, but how does it contrast to its competitors? We will compare The9 to related businesses based on the strength of its earnings, valuation, analyst recommendations, institutional ownership, profitability, dividends and risk.

Risk & Volatility

The9 has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500. Comparatively, The9’s competitors have a beta of 1.19, indicating that their average share price is 19% more volatile than the S&P 500.

Insider & Institutional Ownership

0.5% of The9 shares are owned by institutional investors. Comparatively, 42.1% of shares of all “Software” companies are owned by institutional investors. 30.8% of The9 shares are owned by insiders. Comparatively, 19.9% of shares of all “Software” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares The9 and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
The9	$15.43 million	-$57.55 million	0.61
The9 Competitors	$1.81 billion	$388.42 million	105.44

The9’s competitors have higher revenue and earnings than The9. The9 is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares The9 and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The9	N/A	N/A	N/A
The9 Competitors	-629.01%	24.75%	-9.06%

Analyst Recommendations

This is a summary of recent recommendations for The9 and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The9	1	0	0	0	1.00
The9 Competitors	5555	21189	44230	1464	2.57

As a group, “Software” companies have a potential upside of 332.99%. Given The9’s competitors stronger consensus rating and higher probable upside, analysts clearly believe The9 has less favorable growth aspects than its competitors.

Summary

The9 competitors beat The9 on 9 of the 13 factors compared.

The9 Company Profile

The9 Limited operates as a cryptocurrency mining business in China, Eastern Europe, Asia, and North America. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was incorporated in 1999 and is headquartered in Shanghai, the People’s Republic of China.