Analyzing LivePerson (NASDAQ:LPSN) & Tencent (OTCMKTS:TCEHY)

Tencent (OTCMKTS:TCEHY) and LivePerson (NASDAQ:LPSN) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Earnings & Valuation

This table compares Tencent and LivePerson”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tencent	$104.58 billion	5.41	$31.28 billion	$3.38	18.36
LivePerson	$243.74 million	0.12	-$67.23 million	($13.05)	-0.19

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

Risk and Volatility

Tencent has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, LivePerson has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500.

Insider & Institutional Ownership

0.0% of Tencent shares are held by institutional investors. Comparatively, 79.8% of LivePerson shares are held by institutional investors. 2.0% of LivePerson shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Tencent and LivePerson, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tencent	0	2	2	0	2.50
LivePerson	1	1	0	0	1.50

Tencent currently has a consensus price target of $102.00, suggesting a potential upside of 64.36%. Given Tencent’s stronger consensus rating and higher possible upside, analysts plainly believe Tencent is more favorable than LivePerson.

Profitability

This table compares Tencent and LivePerson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tencent	29.92%	19.18%	11.46%
LivePerson	-27.58%	N/A	-8.06%

Summary

Tencent beats LivePerson on 11 of the 14 factors compared between the two stocks.

About Tencent

Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People's Republic of China and internationally. It operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. The company's consumers business provides communication and services, such as instant messaging and social network; digital content including online games, videos, live streaming, news, music, and literature; fintech services, which includes mobile payment, wealth management, loans, and securities trading; and various tools, such as network security management, browser, navigation, application management, email, etc. Its enterprise business comprises marketing solutions, which offers digital tools including user insight, creative management, placement strategy, and digital assets management; and cloud services, such as cloud computing, big data analytics, artificial intelligence, Internet of Things, security and other technologies for financial services, education, healthcare, retail, industry, transport, energy, and radio & television application. In addition, the company operates innovation business, which includes artificial intelligences; and discover and develops enterprise and next-generation technologies for food production, energy, and water management application. Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004. The company was founded in 1998 and is headquartered in Shenzhen, the People's Republic of China.

About LivePerson

LivePerson, Inc. engages in conversational artificial intelligence. It enables brands to leverage the Conversational Cloud's intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The company offers the Conversational Cloud, an enterprise-class digital customer conversation platform, which enables businesses and consumers to connect through conversational channels, such as voice, in-app, and mobile messaging. It also provides professional services; LivePerson's Conversational AI, including conversation builder, manager, and intelligence, and intent manager. In addition, it provides Voice AI, conversational intelligence and insights, and integration services. The company sells its products to Fortune 500 companies, Internet businesses, online merchants, automotive dealers, educational institution, public sector, and not-for-profit organizations. It operates in the United States, Canada, Latin America, South America, Europe, the Middle East, Africa, the United Kingdom, and the Asia-Pacific. LivePerson, Inc. was incorporated in 1995 and is headquartered in New York, New York.