Contrasting JOYY (NASDAQ:YY) and Gravity (NASDAQ:GRVY)

JOYY (NASDAQ:YY) and Gravity (NASDAQ:GRVY) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for JOYY and Gravity, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JOYY	0	3	0	0	2.00
Gravity	0	0	0	0	N/A

JOYY currently has a consensus target price of $42.00, indicating a potential upside of 29.07%. Given JOYY’s higher probable upside, analysts plainly believe JOYY is more favorable than Gravity.

Earnings and Valuation

This table compares JOYY and Gravity’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JOYY	$2.27 billion	0.87	$301.82 million	$4.97	6.55
Gravity	$555.74 million	0.91	$105.61 million	$13.23	5.48

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
JOYY	13.31%	5.13%	3.15%
Gravity	16.96%	46.65%	36.71%

Volatility & Risk

JOYY has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500. Comparatively, Gravity has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Institutional & Insider Ownership

36.8% of JOYY shares are held by institutional investors. Comparatively, 9.9% of Gravity shares are held by institutional investors. 43.0% of JOYY shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

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.

About Gravity

Gravity Co., Ltd. develops and publishes online and mobile games in South Korea, Taiwan, Thailand, and the United States. The company offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Prequel II. Its mobile games portfolio includes Ragnarok M: Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; and Paladog Tactics. The company also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin; and markets dolls, stationery, food, and other character-based merchandises, as well as game manuals, monthly magazines, and other publications. Further, the company provides system development and maintenance services, as well as system integration services to third parties. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.