Financial Analysis: VNET Group (NASDAQ:VNET) vs. PubMatic (NASDAQ:PUBM)


VNET Group (NASDAQ:VNET – Get Rating) and PubMatic (NASDAQ:PUBM – Get Rating) are both small-cap IT and technology companies, but which is the better company? We’ll compare the two companies based on earnings strength, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Risk and Volatility

VNET Group has a beta of 0.02, suggesting its stock price is 98% less volatile than the S&P 500. Comparatively, PubMatic has a beta of 0.87, suggesting its stock price is 13% less volatile than the S&P 500.

Analyst Notes

This is a summary of recent recommendations and price targets for VNET Group and PubMatic, as provided by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
VNET Group 0 1 4 0 2.80
PubMatic 0 1 9 0 2.90

VNET Group currently has a consensus price target of $16.82, suggesting a potential upside of 230.45%. PubMatic has a consensus price target of $39.80, suggesting a potential upside of 128.34%. Given VNET Group’s possible higher upside, equity research analysts clearly believe that VNET Group is more favorable than PubMatic.

Benefits and evaluation

This table compares the revenue, earnings per share and valuation of VNET Group and PubMatic.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
VNET Group $971.32 million 0.76 $78.48 million ($0.18) -28.28
PubMatic $226.91 million 3.98 $56.60 million $1.00 5:43 p.m.

VNET Group has higher revenue and profit than PubMatic. VNET Group trades at a lower price-to-earnings ratio than PubMatic, indicating that it is currently the more affordable of the two stocks.

Institutional and insider ownership

37.6% of PubMatic shares are held by institutional investors. 12.1% of VNET Group shares are held by insiders. By comparison, 1.2% of PubMatic’s shares are held by insiders. Strong institutional ownership indicates that hedge funds, large fund managers, and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares the net margins, return on equity and return on assets of VNET Group and PubMatic.

Net margins Return on equity return on assets
VNET Group 10.41% 8.95% 2.85%
PubMatic 23.74% 21.35% 10.82%

Summary

PubMatic beats VNET Group on 10 out of 14 factors compared between the two stocks.

About VNET Group

(Get an evaluation)

VNET Group, Inc., an investment holding company, provides hosting and related services in China. It offers managed hosting services consisting of managed retail services, such as colocation services that dedicate data center space to house customers’ servers and network equipment, as well as allow customers to rent partial or entire cabinets for their servers; server administration services; interconnectivity services that allow customers to connect their servers; value-added services including hybrid computing, bare metal, firewall, server load balancing, data backup and recovery, data center management, server management and backup server services; cloud services that enable customers to run applications over the Internet using computing infrastructure; VPN services that extend customers’ private networks by establishing connections over the public Internet. The company also provides support and assistance for operating systems with updates, server monitoring, server backup and recovery, server security assessment, firewall services and disaster recovery services; site selection, planning, design and construction services for wholesale and retail data centers. It serves information technology and cloud services, communications and social networking, games and entertainment, e-commerce, automotive, financial services and blue-chip enterprises and small and medium enterprises; government agencies; people; and telecommunications operators. As of December 31, 2021, it operated 40 self-built data centers and 64 partner data centers with 78,540 cabinets under management. The company was formerly known as 21Vianet Group, Inc. and changed its name to VNET Group, Inc. in October 2021. VNET Group, Inc. was founded in 1999 and is headquartered in Beijing, People’s Republic of China.

About PubMatic

(Get an evaluation)

PubMatic, Inc. provides a cloud infrastructure platform that enables real-time programmatic advertising transactions for Internet content creators and advertisers worldwide. The Company’s solutions include Openwrap, a header bidding solution that provides enterprise-grade management and analytics tools; Openwrap OTT, a header bid management solution for OTT; Openwrap SDK, a header bidding solution for embedded developers; private market solutions; and media buying consoles. Additionally, it offers programmatic real-time bidding (RTB) technologies, which provide various selling options across screens and ad formats; quality digital ad inventory solutions to detect and filter invalid traffic and other nefarious activity; Ad-quality solutions targeting the reduction of security issues, quality issues, and performance issues; Identity Hub, an identity solution that enables the use of any advertiser’s preferred user ID in a scalable and privacy-compliant manner; Audience Encore, an audience data platform; and cross-platform video, a sell-side platform, which connects trusted video buyers with premium publishers. The company’s platform supports an array of ad formats and digital device types, including mobile apps, mobile web, desktop, display, video, over-the- -top (OTT), connected TV and media. PubMatic, Inc. was incorporated in 2006 and is based in Redwood City, California.



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Sarah J. Greer