DoubleDown Interactive (NASDAQ:DDI) versus NetEase (NASDAQ:NTES) Head-To-Head Survey

DoubleDown Interactive (NASDAQ:DDI) and NetEase (NASDAQ:NTES) are both communication services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, institutional ownership, valuation, risk and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for DoubleDown Interactive and NetEase, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DoubleDown Interactive	0	3	2	0	2.40
NetEase	0	3	8	0	2.73

DoubleDown Interactive currently has a consensus price target of $18.33, suggesting a potential upside of 43.85%. NetEase has a consensus price target of $159.00, suggesting a potential upside of 28.45%. Given DoubleDown Interactive’s higher probable upside, research analysts plainly believe DoubleDown Interactive is more favorable than NetEase.

Profitability

This table compares DoubleDown Interactive and NetEase’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DoubleDown Interactive	32.91%	12.93%	11.81%
NetEase	27.86%	19.50%	14.45%

Institutional & Insider Ownership

11.1% of NetEase shares are held by institutional investors. 54.7% of NetEase shares are held by company 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.

Earnings & Valuation

This table compares DoubleDown Interactive and NetEase”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DoubleDown Interactive	$359.94 million	1.75	$102.50 million	$2.52	5.06
NetEase	$16.11 billion	4.92	$4.83 billion	$7.26	17.05

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

Volatility and Risk

DoubleDown Interactive has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, NetEase has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Summary

NetEase beats DoubleDown Interactive on 11 of the 14 factors compared between the two stocks.

About DoubleDown Interactive

DoubleDown Interactive Co., Ltd. engages in the development and publishing of casual games and mobile applications in South Korea. It publishes digital gaming content on mobile and web platforms. The company offers DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox, and cash me out games, as well as sells in-game virtual chips. Its games are primarily distributed, marketed, and promoted through third party platform providers. The company was formerly known as The8Games Co., Ltd. and changed its name to DoubleDown Interactive Co., Ltd. in December 2019. The company was incorporated in 2008 and is headquartered in Seoul, South Korea. DoubleDown Interactive Co., Ltd. is a subsidiary of DoubleU Games Co., Ltd.

About NetEase

NetEase, Inc. engages in online games, music streaming, online intelligent learning services, and internet content services businesses in China and internationally . The company operates through Games and Related Value-Added Services, Youdao, Cloud Music, and Innovative Businesses and Others segments. It develops and operates PC and mobile games, as well as offers games licensed from other game developers. The company's products and services include Youdao Dictionary, an online knowledge tool; Youdao Translation, a tool specifically designed to support translation needs of business and leisure travelers; U-Dictionary, an online dictionary and translation app; Youdao Kids' Dictionary, a smart and fun tool; smart devices, such as Youdao Dictionary Pen, Youdao Smart Learning Pad, Youdao Listening Pod, Youdao Smart Light, Youdao Pocket Translator, and Youdao Super Dictionary; online courses; interactive learning apps; and education digitalization solutions, such as Youdao Smart Learning Terminal, a device that automates paper-based homework processing; Youdao Smart Cloud, a cloud-based platform that allows third-party app developers, smart device brands, and manufacturers to the company's OCR capabilities; and Youdao Sports, a sports-centric educational system. Its products and services also include NetEase Cloud Music, a music streaming platform; Yanxuan, an e-commerce platform, which sells private label products; www.163.com portal and related mobile app, Wangyi Xinwen, which deliver information such as news, sports events, technology, fashion trends, and online entertainment; NetEase Mail, an email service; NetEase CC Live streaming, a live streaming platform with a focus on game broadcasting; and NetEase Pay, a payment platform. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Hangzhou, the People's Republic of China.