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

Analyst Ratings

This is a summary of current recommendations and price targets for Red Hat and 58.com, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red Hat 0 13 10 0 2.43
58.com 1 2 3 0 2.33

Red Hat currently has a consensus target price of $167.05, indicating a potential downside of 9.30%. 58.com has a consensus target price of $69.00, indicating a potential upside of 22.97%. Given 58.com’s higher possible upside, analysts plainly believe 58.com is more favorable than Red Hat.

Earnings & Valuation

This table compares Red Hat and 58.com’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Red Hat $3.36 billion 9.74 $433.99 million $2.79 66.01
58.com $1.91 billion 4.29 $310.23 million $1.94 28.92

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

Profitability

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

Net Margins Return on Equity Return on Assets
Red Hat 12.91% 35.35% 9.84%
58.com 18.44% 15.60% 10.85%

Institutional & Insider Ownership

85.9% of Red Hat shares are held by institutional investors. Comparatively, 59.3% of 58.com shares are held by institutional investors. 0.6% of Red Hat shares are held by company insiders. Comparatively, 11.9% of 58.com shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Red Hat has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500. Comparatively, 58.com has a beta of 1.72, meaning that its stock price is 72% more volatile than the S&P 500.

Summary

Red Hat beats 58.com on 9 of the 14 factors compared between the two stocks.

About Red Hat

Red Hat, Inc. provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide. It offers infrastructure-related solutions, such as Red Hat Enterprise Linux, an operating system platform that runs on hardware for use in hybrid cloud environments; Red Hat Satellite, a system management offering that helps to deploy, scale, and manage in hybrid cloud environments; and Red Hat Enterprise Virtualization, a software solution that allows customers to utilize and manage a common hardware infrastructure to run multiple operating systems and applications. The company offers application development-related and other technology solutions, such as Red Hat JBoss Middleware, a solution for developing, deploying, and managing applications; integrating applications, data, and devices; and automating business processes in hybrid cloud environments; The company's application development-related and other technology solutions also includes Red Hat cloud offerings, a software solution that enables customers to build and manage various cloud computing environments; Red Hat Mobile, a software development platform that enables customers to develop, integrate, deploy, and manage mobile applications for enterprises; and Red Hat Storage, a software solution that enables customers to manage large, unstructured, or semi-structured data in hybrid cloud environments. It also provides consulting, support, and training services; and realtime operating system, distributed computing, directory services, and user authentication. Red Hat, Inc. has collaboration with Juniper Networks Expand to provide a unified solution for enterprises designed to manage and run applications and services. The company was formerly known as Red Hat Software, Inc. and changed its name to Red Hat, Inc. in June 1999. Red Hat, Inc. was founded in 1993 and is headquartered in Raleigh, North Carolina.

About 58.com

58.com Inc. operates various multi-category online classifieds platforms and vertical listing platforms that enable local businesses and consumers to connect, share information, and conduct business in the People's Republic of China. It operates multi-content category online classified platforms primarily under the 58 and Ganji names; Anjuke, an online real estate listing platform; ChinaHR, an online recruitment platform that focuses on white collar jobs; and Jia Xiao Yi Dian Tong, an online platform for driver's license examination preparation and other related services. The company also operates Zhuan Zhuan, an online used goods trading and service platform; and 58 Town, a rural version of 58.com. Its platform offers content in the categories, including real estate, jobs, automotive, yellow pages, and used goods. 58.com Inc. was founded in 2005 and is headquartered in Beijing, the People's Republic of China.

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