Financial Analysis: JOYY (NASDAQ:YY) & Snap (NYSE:SNAP)

Snap (NYSE:SNAP) and JOYY (NASDAQ:YY) are both mid-cap communication services companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Risk and Volatility

Snap has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, JOYY has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500.

Profitability

This table compares Snap and JOYY’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Snap	-6.72%	-18.92%	-5.44%
JOYY	9.02%	4.64%	2.96%

Earnings & Valuation

This table compares Snap and JOYY”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Snap	$6.10 billion	1.40	-$460.49 million	($0.24)	-21.04
JOYY	$2.24 billion	1.77	$301.82 million	($3.10)	-23.73

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

Insider & Institutional Ownership

47.5% of Snap shares are held by institutional investors. Comparatively, 36.8% of JOYY shares are held by institutional investors. 22.7% of Snap shares are held by insiders. Comparatively, 43.0% of JOYY shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Snap and JOYY, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Snap	2	25	8	1	2.22
JOYY	0	0	2	0	3.00

Snap presently has a consensus target price of $7.23, indicating a potential upside of 43.18%. JOYY has a consensus target price of $66.00, indicating a potential downside of 10.29%. Given Snap’s higher probable upside, equities analysts clearly believe Snap is more favorable than JOYY.

Summary

JOYY beats Snap on 8 of the 15 factors compared between the two stocks.

About Snap

Snap Inc. operates as a technology company in North America, Europe, and internationally. The company offers Snapchat, a visual messaging application with various tabs, such as camera, visual messaging, snap map, stories, and spotlight that enable people to communicate visually through short videos and images. It also provides Spectacles, an eyewear product that connects with Snapchat and captures photos and video from a human perspective; and advertising products, including AR ads and Snap ads comprises a single image or video ads, collection ads, dynamic ads, story ads, and commercials. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California.

About JOYY

JOYY Inc., together with its subsidiaries, operates social media platforms that offer users engaging and experience across various video-based social platforms. It operates through two segments, BIGO and All Other. The company operates Bigo Live, a social live streaming platform, that provides an interactive online stage for users to host and watch live streaming sessions, share their life moments, showcase their talents, and interact with people worldwide; Likee, a short-form video social platform, which enables users to discover, create, and share short videos, with video creation tools and personalized feeds; imo, an instant messenger platform, that provides audio and video communication services; Hago, a social networking platform that offers casual games integrating social features, such as audio and video multi-user chatrooms and 3D virtual interactive party games; and Shopline, a smart commerce platform, that provides solutions and services to enable merchants in creating and growing their brands online and reach customers through various sales channels, including e-commerce platforms, social commerce, and physical retail stores. It operates in the People's Republic of China, the United States, the Great Britain, Japan, South Korea, Australia, the Middle East, Southeast Asia, and internationally. The company was formerly known as YY Inc. and changed its name to JOYY Inc. in December 2019. JOYY Inc. was founded in 2005 and is headquartered in Singapore.