Comparing IMAX (NYSE:IMAX) and NetEase (NASDAQ:NTES)

NetEase (NASDAQ:NTES) and IMAX (NYSE:IMAX) are both communication services companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares NetEase and IMAX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NetEase	27.86%	19.50%	14.45%
IMAX	9.84%	15.47%	7.49%

Earnings and Valuation

This table compares NetEase and IMAX”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NetEase	$116.60 billion	0.68	$4.83 billion	$7.26	16.94
IMAX	$410.21 million	7.10	$34.88 million	$0.72	73.75

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

Volatility & Risk

NetEase has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, IMAX has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for NetEase and IMAX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NetEase	0	3	6	0	2.67
IMAX	0	3	11	1	2.87

NetEase presently has a consensus price target of $159.86, suggesting a potential upside of 29.99%. IMAX has a consensus price target of $57.38, suggesting a potential upside of 8.07%. Given NetEase’s higher probable upside, analysts plainly believe NetEase is more favorable than IMAX.

Institutional and Insider Ownership

11.1% of NetEase shares are owned by institutional investors. Comparatively, 93.5% of IMAX shares are owned by institutional investors. 54.7% of NetEase shares are owned by company insiders. Comparatively, 20.6% of IMAX shares are owned by company 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

NetEase beats IMAX on 9 of the 15 factors compared between the two stocks.

About NetEase

NetEase, Inc. engages in online games, music streaming, online intelligent learning services, and internet content services businesses in China and internationally . The company operates through Games and Related Value-Added Services, Youdao, Cloud Music, and Innovative Businesses and Others segments. It develops and operates PC and mobile games, as well as offers games licensed from other game developers. The company's products and services include Youdao Dictionary, an online knowledge tool; Youdao Translation, a tool specifically designed to support translation needs of business and leisure travelers; U-Dictionary, an online dictionary and translation app; Youdao Kids' Dictionary, a smart and fun tool; smart devices, such as Youdao Dictionary Pen, Youdao Smart Learning Pad, Youdao Listening Pod, Youdao Smart Light, Youdao Pocket Translator, and Youdao Super Dictionary; online courses; interactive learning apps; and education digitalization solutions, such as Youdao Smart Learning Terminal, a device that automates paper-based homework processing; Youdao Smart Cloud, a cloud-based platform that allows third-party app developers, smart device brands, and manufacturers to the company's OCR capabilities; and Youdao Sports, a sports-centric educational system. Its products and services also include NetEase Cloud Music, a music streaming platform; Yanxuan, an e-commerce platform, which sells private label products; www.163.com portal and related mobile app, Wangyi Xinwen, which deliver information such as news, sports events, technology, fashion trends, and online entertainment; NetEase Mail, an email service; NetEase CC Live streaming, a live streaming platform with a focus on game broadcasting; and NetEase Pay, a payment platform. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Hangzhou, the People's Republic of China.

About IMAX

IMAX Corporation, together with its subsidiaries, operates as a technology platform for entertainment and events worldwide. The company operates in two segments, Content Solutions and Technology Products and Services. The company offers IMAX DMR, a proprietary technology that digitally remasters films and other content into IMAX formats for distribution to the IMAX network; IMAX Enhanced that provides end-to-end technology across streaming content and entertainment devices at home; and SSIMWAVE, an AI-driven video quality solutions for media and entertainment companies. It also offers preventative and emergency maintenance services and quality monitoring to the IMAX network; film post-production services; and IMAX film and digital cameras to content creators. In addition, the company engages in the distribution of large-format documentary films to institutional theaters, as well as live performances and interactive events with artists and creators; after-market sales of IMAX System parts and 3D glasses; sale or lease of IMAX theater systems; provision of management services to three other theaters, as well as production advice and technical assistance to documentary and Hollywood filmmakers; and rental of company’s proprietary 2D and 3D large-format film cameras. The company markets its theater systems through a direct sales force and marketing staff to science and natural history museums, zoos, aquaria, and other educational and cultural centers, as well as theme parks, private home theaters, tourist destination sites, fairs, and expositions. It offers its services under the IMAX, IMAX 3D, Experience It In IMAX, The IMAX Experience, DMR, Filmed For IMAXTM, IMAX Live, IMAX Enhanced, and SSIMWAVE. The company operates a network of IMAX systems comprising commercial multiplexes, commercial destinations, and institutional locations in 90 countries and territories. IMAX Corporation was founded in 1967 and is headquartered in Mississauga, Canada.