Critical Review: DocuSign (NASDAQ:DOCU) & Cheetah Mobile (NYSE:CMCM)

Cheetah Mobile (NYSE:CMCM) and DocuSign (NASDAQ:DOCU) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Insider and Institutional Ownership

0.4% of Cheetah Mobile shares are held by institutional investors. Comparatively, 77.6% of DocuSign shares are held by institutional investors. 17.1% of Cheetah Mobile shares are held by company insiders. Comparatively, 1.7% of DocuSign shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Cheetah Mobile and DocuSign’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheetah Mobile	N/A	N/A	N/A
DocuSign	34.56%	16.18%	6.47%

Valuation and Earnings

This table compares Cheetah Mobile and DocuSign”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheetah Mobile	$709.82 million	0.17	-$84.92 million	N/A	N/A
DocuSign	$2.86 billion	4.42	$73.98 million	$0.52	118.60

DocuSign has higher revenue and earnings than Cheetah Mobile.

Analyst Ratings

This is a summary of current ratings and recommmendations for Cheetah Mobile and DocuSign, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheetah Mobile	0	0	0	0	N/A
DocuSign	2	7	2	0	2.00

DocuSign has a consensus price target of $63.40, suggesting a potential upside of 2.81%. Given DocuSign’s higher probable upside, analysts plainly believe DocuSign is more favorable than Cheetah Mobile.

Volatility and Risk

Cheetah Mobile has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, DocuSign has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Summary

DocuSign beats Cheetah Mobile on 9 of the 11 factors compared between the two stocks.

About Cheetah Mobile

Cheetah Mobile Inc. along with its subsidiaries, engages in provision of internet services, artificial intelligence, and other services in the People's Republic of China, Hong Kong, Japan, and internationally. The company's internet products include Duba Anti-virus, an internet security application to protect users against known and unknown security threats and malicious applications; and Clean Master, a junk file cleaning, memory boosting, and privacy protection tool for mobile devices. It also offers value-added products, such as PC and mobile products, as well as wallpaper, office optimization software, and others; E-Coupon vending robot, a delivery and reception robot, which includes marketing campaigns and services; and multi-cloud management platform and overseas advertising agency service. In addition, the company provides mobile advertising services; duba.com personal start page that aggregates online resources and provides users access to their online destinations, such as online shopping, video, online game, travel, and local information; artificial intelligence and other services; and premium membership services. It serves mobile advertising networks and partners, e-commerce companies, mobile application developers, and mobile game developers, as well as individual customers. The company was formerly known as Kingsoft Internet Software Holdings Limited and changed its name to Cheetah Mobile Inc. in March 2014. Cheetah Mobile Inc. was incorporated in 2009 and is based in Beijing, the People's Republic of China.

About DocuSign

DocuSign, Inc. provides electronic signature solution in the United States and internationally. The company provides e-signature solution that enables sending and signing of agreements on various devices; Contract Lifecycle Management (CLM), which automates workflows across the entire agreement process; Document Generation streamlines the process of generating new, custom agreements; and Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce. It also provides Identify, a signer-identification option for checking government-issued IDs; Standards-Based Signatures, which support signatures that involve digital certificates; Monitor that uses advanced analytics to track DocuSign eSignature web, mobile, and API account; Notary which enables notaries public to conduct remote online notarization transactions; and Web Forms, a web forms that quickly draft agreements using pre-populated data from completed forms or external systems via APIs. In addition, the company offers Rooms for Real Estate that provides a way for brokers and agents to manage the entire real estate transaction digitally. Signature and CLM are FedRAMP, an authorized version of DocuSign eSignature for U.S. federal government agencies; and life sciences modules that support compliance with the electronic signature practices. The company sells its products through direct and partner-assisted sales, and digital self-service purchasing. DocuSign, Inc. was incorporated in 2003 and is headquartered in San Francisco, California.