Contrasting 58.com (WUBA) and NIC (EGOV)

NIC (NASDAQ: EGOV) and 58.com (NYSE:WUBA) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for NIC and 58.com, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 0 4 1 0 2.20
58.com 2 2 5 0 2.33

NIC currently has a consensus price target of $18.00, suggesting a potential upside of 38.46%. 58.com has a consensus price target of $50.63, suggesting a potential downside of 30.84%. Given NIC’s higher probable upside, research analysts plainly believe NIC is more favorable than 58.com.

Earnings and Valuation

This table compares NIC and 58.com’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NIC $336.51 million 2.56 $51.61 million $0.77 16.88
58.com $1.14 billion 9.39 -$110.71 million $0.74 98.92

NIC has higher earnings, but lower revenue than 58.com. NIC is trading at a lower price-to-earnings ratio than 58.com, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares NIC and 58.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NIC 15.34% 33.25% 19.91%
58.com 7.93% 4.08% 2.80%

Volatility and Risk

NIC has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, 58.com has a beta of 2.13, meaning that its share price is 113% more volatile than the S&P 500.

Institutional & Insider Ownership

92.3% of NIC shares are held by institutional investors. Comparatively, 60.8% of 58.com shares are held by institutional investors. 4.1% of NIC shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

NIC pays an annual dividend of $0.32 per share and has a dividend yield of 2.5%. 58.com does not pay a dividend. NIC pays out 41.6% of its earnings in the form of a dividend.

Summary

NIC beats 58.com on 9 of the 16 factors compared between the two stocks.

About NIC

NIC Inc. is a provider of digital government services that help governments use technology to provide services to businesses and citizens. The Company operates through Outsourced Portals segment. The Company offers its services through two channels: primary outsourced portal businesses, and software and services businesses. In the primary outsourced portal businesses, the Company enters into contracts with state and local governments to design, build, and operate Internet-based, enterprise-wide portals on their behalf. Its software and services businesses include its subsidiaries that provide software development and payment processing services, other than outsourced portal services, to state and local governments, as well as federal agencies. The Company’s outsourced portal businesses include interactive government services (IGS), driver history records (DHR), Portal software development and services, and Portal management.

About 58.com

58.com Inc. is a holding company. The Company’s business consists of its online classifieds and listing platforms. Its online classifieds and listings platforms enable local merchants and consumers to connect, share information and conduct business in China. These platforms include 58, Ganji and Anjuke. 58 and Ganji are online multi-content category-classified advertising platforms, while Anjuke is an online real estate listing platform. In addition, 58 Daojia Inc., its subsidiary, operates a mobile-based closed-loop transactional platform for home services, which directly connects consumers and individual service providers for local services, such as home cleaning, moving services and manicure services provided at home. Its classifieds and listing platforms contain local information for over 480 cities across various content categories, including jobs, real estate, used goods, automotive and yellow pages. It also offers membership, online marketing services and e-commerce services.

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