Financial Survey: RingCentral (NYSE:RNG) versus Sohu.com (NASDAQ:SOHU)

Sohu.com (NASDAQ:SOHU) and RingCentral (NYSE:RNG) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Profitability

This table compares Sohu.com and RingCentral’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sohu.com	-15.14%	-7.67%	-4.23%
RingCentral	-4.17%	-2.55%	0.72%

Volatility & Risk

Sohu.com has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, RingCentral has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

33.0% of Sohu.com shares are held by institutional investors. Comparatively, 98.6% of RingCentral shares are held by institutional investors. 21.1% of Sohu.com shares are held by company insiders. Comparatively, 7.0% of RingCentral shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Sohu.com and RingCentral”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sohu.com	$578.27 million	0.76	-$30.38 million	($2.81)	-4.81
RingCentral	$2.36 billion	1.42	-$165.24 million	($1.06)	-34.90

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

Analyst Ratings

This is a breakdown of recent ratings for Sohu.com and RingCentral, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sohu.com	0	0	0	0	0.00
RingCentral	0	8	5	1	2.50

RingCentral has a consensus price target of $42.00, indicating a potential upside of 13.54%. Given RingCentral’s stronger consensus rating and higher probable upside, analysts plainly believe RingCentral is more favorable than Sohu.com.

Summary

RingCentral beats Sohu.com on 11 of the 15 factors compared between the two stocks.

About Sohu.com

Sohu.com Limited engages in the provision of online media, video, and game products and services on personal computers (PCs) and mobile devices in China. It operates through two segments: Sohu and Changyou. The company offers online news, information, and content services through the mobile phone application Sohu News APP, mobile portal m.sohu.com, and www.sohu.com for PCs; and online video content and services through mobile phone application Sohu Video APP and tv.sohu.com, as well as ifox, a video application for PC. It also operates Focus (www.focus.cn), which provides online real estate information and services; and 17173.com website, which provides news, electronic forums, online videos, and other online game information services to game players, as well as offers mobile game distribution services. In addition, the company offers interactive online games for PCs and mobile devices. Further, it provides paid subscription and interactive broadcasting services. The company was incorporated in 1996 and is headquartered in Beijing, China.

About RingCentral

RingCentral, Inc., together with its subsidiaries, provides cloud communications, video meetings, collaboration, and contact center software-as-a-service solutions worldwide. The company’s products include RingCentral Message Video Phone that provides a unified experience for communication and collaboration across multiple modes, including HD voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax; RingCentral Contact Center, a collaborative contact center solution that delivers AI-powered omnichannel and workforce engagement solutions with integrated RingCentral MVP; and RingCX, an AI-powered contact center that a native delivers omnichannel experience. It provides RingCentral Video, a video meeting service that includes the company’s RCV video and team messaging capabilities; offers video and audio conferencing, team messaging, file sharing, contact, task, and calendar management, as well as pre-meeting, in-meeting, and post-meeting capabilities. In addition, the company offers RingCentral Professional Services, which include consultation, UCaaS and CCaaS implementation, VoIP phone system adoption, configuring custom workflows, customer and user onboarding, ongoing support, advanced support, managed services, and more. It serves a range of industries, including financial services, education, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, state and local government, and others. It sells its products to enterprise customers, as well as small and medium-sized businesses through resellers and distributors, partners, and global service providers. RingCentral, Inc. was incorporated in 1999 and is headquartered in Belmont, California.