Contrasting Xunlei (NASDAQ:XNET) & Adobe (NASDAQ:ADBE)

Adobe (NASDAQ:ADBE) and Xunlei (NASDAQ:XNET) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings for Adobe and Xunlei, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adobe	5	21	7	0	2.06
Xunlei	0	1	0	0	2.00

Adobe currently has a consensus target price of $282.68, indicating a potential upside of 21.41%. Given Adobe’s stronger consensus rating and higher probable upside, equities analysts plainly believe Adobe is more favorable than Xunlei.

Insider and Institutional Ownership

81.8% of Adobe shares are owned by institutional investors. Comparatively, 5.1% of Xunlei shares are owned by institutional investors. 0.2% of Adobe shares are owned by insiders. Comparatively, 21.7% of Xunlei shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Adobe has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Xunlei has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Profitability

This table compares Adobe and Xunlei’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adobe	28.05%	65.65%	25.54%
Xunlei	-15.25%	0.62%	0.52%

Valuation and Earnings

This table compares Adobe and Xunlei”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adobe	$23.77 billion	3.81	$7.13 billion	$17.92	12.99
Xunlei	$462.41 million	0.67	$1.05 billion	($1.24)	-3.90

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

Summary

Adobe beats Xunlei on 13 of the 14 factors compared between the two stocks.

About Adobe

Adobe Inc., together with its subsidiaries, operates as a diversified software company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content; and Document Cloud, a unified cloud-based document services platform. Its flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, students, workers, marketers, educators, enthusiasts, and communicators. The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite. The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as Advertising Cloud offerings. It also provides consulting, technical support, and learning services. The company offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website at adobe.com. It also distributes products and services through distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and original equipment manufacturers. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California.

About Xunlei

Xunlei Limited, together with its subsidiaries, operates an internet platform for digital media content in the People's Republic of China. Its platform is based on cloud technology that enables users to access, store, manage, and consume digital media content. The company offers Xunlei Accelerator, which enables users to accelerate digital transmission over the internet; mobile acceleration plug-in, which provides mobile device users with benefits of download speed acceleration and download success rate improvements; and subscription services that offer users premium services through Green Channel and Fast Bird products. It also provides Mobile Xunlei, a mobile application that allows users to search, download, consume, and store digital media content; Xunlei Media Player, which supports online and offline play of digital media content, as well as simultaneous play of digital media content while it is being transmitted by Xunlei Accelerator; online games through online game website and mobile app; advertising services; live streaming products, including video and audio livestreaming; and develops software and computer software, as well as other internet value-added services. In addition, the company offers cloud computing services through OneThing Cloud, and StellarCloud; and hardware for edging computing, such as OneThing Edge Cube, and OneThing Edge Atom. Further it offers ThunderChain, a blockchain infrastructure product that enables its users to develop and manage blockchain applications. The company was formerly known as Giganology Limited and changed its name to Xunlei Limited in January 2011. Xunlei Limited was founded in 2003 and is headquartered in Shenzhen, the People's Republic of China.