Critical Comparison: Autohome (NYSE:ATHM) & DoubleDown Interactive (NASDAQ:DDI)

DoubleDown Interactive (NASDAQ:DDI) and Autohome (NYSE:ATHM) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Profitability

This table compares DoubleDown Interactive and Autohome’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DoubleDown Interactive	34.85%	15.62%	14.27%
Autohome	25.81%	8.19%	6.35%

Institutional and Insider Ownership

63.1% of Autohome shares are held by institutional investors. 5.7% of Autohome shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares DoubleDown Interactive and Autohome”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DoubleDown Interactive	$332.46 million	2.20	$100.89 million	$2.15	6.87
Autohome	$7.30 billion	0.54	$286.40 million	$2.11	14.77

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

Analyst Recommendations

This is a summary of current ratings for DoubleDown Interactive and Autohome, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DoubleDown Interactive	0	0	4	0	3.00
Autohome	0	2	0	1	2.67

DoubleDown Interactive presently has a consensus price target of $20.08, indicating a potential upside of 35.97%. Autohome has a consensus price target of $28.00, indicating a potential downside of 10.14%. Given DoubleDown Interactive’s stronger consensus rating and higher possible upside, equities research analysts clearly believe DoubleDown Interactive is more favorable than Autohome.

Risk & Volatility

DoubleDown Interactive has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, Autohome has a beta of 0.16, meaning that its stock price is 84% less volatile than the S&P 500.

Summary

DoubleDown Interactive beats Autohome on 9 of the 15 factors compared between the two stocks.

About DoubleDown Interactive

DoubleDown Interactive Co., Ltd. engages in the development and publishing of casual games and mobile applications in South Korea. It publishes digital gaming content on mobile and web platforms. The company offers DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox, and cash me out games, as well as sells in-game virtual chips. Its games are primarily distributed, marketed, and promoted through third party platform providers. The company was formerly known as The8Games Co., Ltd. and changed its name to DoubleDown Interactive Co., Ltd. in December 2019. The company was incorporated in 2008 and is headquartered in Seoul, South Korea. DoubleDown Interactive Co., Ltd. is a subsidiary of DoubleU Games Co., Ltd.

About Autohome

Autohome Inc. operates as an online destination for automobile consumers in the People’s Republic of China. The company delivers interactive content and tools to automobile consumers through its three websites, autohome.com.cn, che168.com, and ttpai.cn on PCs, mobile devices, mobile applications, and mini apps. It provides media services, including automaker advertising services and regional marketing campaigns; and leads generation services comprising dealer subscription services, advertising services for individual dealers, and used automobile listing and other platform-based services. The company offers Autohome Mall, an online transaction platform; and online bidding platform for used automobiles, as well as collects commissions for facilitating transactions of auto-financing and insurance products on its platform. The company was formerly known as Sequel Limited and changed its name to Autohome Inc. in October 2011. Autohome Inc. was incorporated in 2008 and is headquartered in Beijing, the People’s Republic of China.