Weibo (NASDAQ:WB – Get Free Report) and Yalla Group (NYSE:YALA – Get Free Report) are both small-cap communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.
Profitability
This table compares Weibo and Yalla Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| 17.78% | 8.87% | 4.96% | |
| Yalla Group | 40.78% | 16.82% | 15.14% |
Risk and Volatility
Weibo has a beta of 0.17, indicating that its stock price is 83% less volatile than the S&P 500. Comparatively, Yalla Group has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent recommendations for Weibo and Yalla Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| 2 | 3 | 1 | 0 | 1.83 | |
| Yalla Group | 0 | 1 | 0 | 0 | 2.00 |
Weibo presently has a consensus target price of $8.10, suggesting a potential upside of 28.57%. Given Weibo’s higher possible upside, equities analysts plainly believe Weibo is more favorable than Yalla Group.
Valuation and Earnings
This table compares Weibo and Yalla Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| $1.76 billion | 0.88 | $449.02 million | $1.21 | 5.21 | |
| Yalla Group | $341.94 million | 2.48 | $149.84 million | $0.77 | 7.21 |
Weibo has higher revenue and earnings than Yalla Group. Weibo is trading at a lower price-to-earnings ratio than Yalla Group, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
68.8% of Weibo shares are held by institutional investors. Comparatively, 4.7% of Yalla Group shares are held by institutional investors. 41.3% of Weibo shares are held by insiders. Comparatively, 52.2% of Yalla Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Summary
Yalla Group beats Weibo on 8 of the 14 factors compared between the two stocks.
About Weibo
Weibo Corporation, through its subsidiaries, operates as a social media platform for people to create, discover, and distribute content in the People’s Republic of China. It operates in two segments, Advertising and Marketing Services; and Value-Added Services. The company offers discovery products to help users discover content on its platform; self-expression products that enable its users to express themselves on its platform; and social products to promote social interaction between users on its platform. It also provides advertising and marketing solutions, such as social display advertisements; and promoted marketing offerings, such as Fans Headline and Weibo Express promoted feeds, as well as promoted trends and search products that appear alongside user’s trends discovery and search behaviors. In addition, the company offers products, such as trends, search, video/live streaming, and editing tools; content customization, copyright contents pooling, and user interaction development; and search list recommendation, trends list recommendation, and Weibo app opening advertisements. Further, it provides back-end management, traffic support, and product services for better displaying and promotion of its account and content; open application platform for other app developers that allows users to log into third-party applications with their Weibo account for sharing third-party content on its platform; and Weibo Wallet, a product that enables platform partners to conduct interest generation activities on Weibo, such as handing out red envelops and coupons. The company was formerly known as T.CN Corporation and changed its name to Weibo Corporation in 2012. The company was founded in 2009 and is headquartered in Beijing, the People’s Republic of China.
About Yalla Group
Yalla Group Limited operates a social networking and gaming platform primarily in the Middle East and North Africa region. It provides mobile applications, including Yalla, a voice-centric group chat platform; and Yalla Ludo, a casual gaming application. The company’s platform offers group chatting and games services; and sells virtual items, as well as provides upgrade services. The company was formerly known as FYXTech Corporation. Yalla Group Limited was founded in 2016 and is headquartered in Dubai, the United Arab Emirates.
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