Applied Digital (NASDAQ:APLD – Get Free Report) and Gravity (NASDAQ:GRVY – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.
Insider & Institutional Ownership
65.7% of Applied Digital shares are owned by institutional investors. Comparatively, 9.9% of Gravity shares are owned by institutional investors. 20.5% of Applied Digital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Applied Digital and Gravity, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Applied Digital | 0 | 0 | 5 | 0 | 3.00 |
| Gravity | 0 | 0 | 0 | 0 | N/A |
Profitability
This table compares Applied Digital and Gravity’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Applied Digital | -61.84% | -75.46% | -20.50% |
| Gravity | 16.96% | 46.65% | 36.71% |
Valuation and Earnings
This table compares Applied Digital and Gravity’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Applied Digital | $143.91 million | 6.20 | -$44.65 million | ($0.79) | -8.23 |
| Gravity | $555.74 million | 0.99 | $105.61 million | $13.23 | 5.96 |
Gravity has higher revenue and earnings than Applied Digital. Applied Digital is trading at a lower price-to-earnings ratio than Gravity, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Applied Digital has a beta of 4.38, indicating that its share price is 338% more volatile than the S&P 500. Comparatively, Gravity has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500.
Summary
Gravity beats Applied Digital on 7 of the 13 factors compared between the two stocks.
About Applied Digital
Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.
About Gravity
Gravity Co., Ltd. develops and publishes online and mobile games in South Korea, Taiwan, Thailand, and the United States. The company offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Prequel II. Its mobile games portfolio includes Ragnarok M: Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; and Paladog Tactics. The company also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin; and markets dolls, stationery, food, and other character-based merchandises, as well as game manuals, monthly magazines, and other publications. Further, the company provides system development and maintenance services, as well as system integration services to third parties. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.
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