Comparing Sunlands Technology Group (NYSE:STG) & Baidu (NASDAQ:BIDU)

Baidu (NASDAQ:BIDU) and Sunlands Technology Group (NYSE:STG) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Volatility and Risk

Baidu has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, Sunlands Technology Group has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Institutional & Insider Ownership

26.4% of Sunlands Technology Group shares are held by institutional investors. 16.7% of Baidu shares are held by insiders. Comparatively, 59.7% of Sunlands Technology Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Baidu and Sunlands Technology Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baidu	$18.46 billion	2.06	$799.00 million	($0.12)	-930.74
Sunlands Technology Group	$288.84 million	0.19	$52.28 million	$3.86	1.06

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

Analyst Recommendations

This is a summary of current ratings and target prices for Baidu and Sunlands Technology Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baidu	2	4	16	1	2.70
Sunlands Technology Group	1	0	0	0	1.00

Baidu currently has a consensus target price of $162.58, suggesting a potential upside of 45.56%. Given Baidu’s stronger consensus rating and higher possible upside, equities analysts clearly believe Baidu is more favorable than Sunlands Technology Group.

Profitability

This table compares Baidu and Sunlands Technology Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baidu	1.08%	4.97%	3.09%
Sunlands Technology Group	18.56%	39.98%	17.58%

Summary

Sunlands Technology Group beats Baidu on 8 of the 15 factors compared between the two stocks.

About Baidu

Baidu, Inc. engages in the provision of internet search services in China. It operates through two segments: Baidu Core and iQIYI. The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with personalized timeline based on their demographics and interests; Baidu Health that helps users to find the doctor and hospital for healthcare needs; and Haokan, a short video app. It also provides Baidu Knows, an online community where users can ask questions to other users; Baidu Wiki; Baidu Experience; Baidu Post; ERNIE Bot, conversational AI bot; Baidu Wenku; Baidu Maps, a voice-enabled mobile app that provides travel-related services; Baidu Drive; Baijiahao; and DuerOS, a smart assistant platform. In addition, it offers online marketing services, which include pay for performance, an auction-based services that allow customers to bid for priority placement of paid sponsored links and reach users who search for information related to their products or services; other marketing services that include display-based marketing services and other online marketing services based on performance criteria other than cost per click; mobile ecosystem, a portfolio of apps, including Baidu App, Haokan, and Baidu Post; various cloud services and solutions, such as platform as a service, software as a service, and infrastructure as a service; self-driving services, including maps, automated valet parking, navigation pilot, electric vehicles, and robotaxi fleets, as well as Xiaodu smart devices. Further, the company provides iQIYI, an online entertainment service, including original and licensed content; other video content and membership; and online advertising services. It has strategic partnership with Zhejiang Geely Holding Group. The company was formerly known as Baidu.com, Inc. Baidu, Inc. was incorporated in 2000 and is headquartered in Beijing, China.

About Sunlands Technology Group

Sunlands Technology Group, through its subsidiaries, provides online education services through online and mobile platforms in the People's Republic of China. It offers various degree- and diploma-oriented post-secondary courses, including preparation courses for the self-taught higher education examination (STE) for learners pursuing associate diplomas or bachelor's degrees, as well as for the entrance examinations of Master of Business Administration programs. The company's STE courses include Chinese language and literature, law, pre-school education, marketing, English, human resource management, business administration, business management, modern corporate governance, financial management, advertising, accounting, administrative management, computer information management, finance, chain operation management, and visual communication and design and production. It also provides professional certification preparation courses in various industries and professions, such as accounting, human resources, teaching, and finance. In addition, the company offers education services through online and mobile platforms to adult students, pursuing post-secondary, and professional educations. The company was formerly known as Sunlands Online Education Group and changed its name to Sunlands Technology Group in August 2018. Sunlands Technology Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.