Analyzing 8X8 (NASDAQ:EGHT) and Gravity (NASDAQ:GRVY)

Gravity (NASDAQ:GRVY) and 8X8 (NASDAQ:EGHT) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Analyst Ratings

This is a summary of recent ratings for Gravity and 8X8, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gravity	0	0	0	0	0.00
8X8	3	2	3	0	2.00

8X8 has a consensus price target of $2.99, suggesting a potential upside of 39.19%. Given 8X8’s stronger consensus rating and higher probable upside, analysts clearly believe 8X8 is more favorable than Gravity.

Valuation and Earnings

This table compares Gravity and 8X8″s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gravity	$516.65 billion	0.00	$105.61 million	$8.98	6.66
8X8	$717.44 million	0.39	-$67.59 million	($0.36)	-5.96

Gravity has higher revenue and earnings than 8X8. 8X8 is trading at a lower price-to-earnings ratio than Gravity, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Gravity and 8X8’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gravity	14.98%	34.76%	28.79%
8X8	-6.33%	-1.45%	-0.21%

Volatility and Risk

Gravity has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, 8X8 has a beta of 1.78, meaning that its stock price is 78% more volatile than the S&P 500.

Institutional and Insider Ownership

9.9% of Gravity shares are held by institutional investors. Comparatively, 94.0% of 8X8 shares are held by institutional investors. 1.2% of 8X8 shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

About Gravity

Gravity Co., Ltd. develops and publishes online and mobile games worldwide. It offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Landverse. Its mobile games portfolio includes Ragnarok M; Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; Ragnarok Arena; WITH ISLAND; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; Generation Zombie; Ragnarok Idle Adventure; Ragnarok 20 Heroes; White Chord; WITH: Whale In The High; Ragnarok Lost Memories; and Paladog Tactics. It 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; Pigromance for Steam, Stove, Nintendo Switch, Xbox One, Xbox Series X|S; ALTF4 11 for Steam and Stove; Wetory for Steam, Stove, Nintedo Switch; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin, and Kongsuni; and markets dolls, stationery, food, and other character based merchandises, as well as game manuals, monthly magazines, and other publications; PC games, including Puzzle Platformer, ALTF42, Ragnarok ZERO, KAMiBAKO-Mythology of Cube, Psychodemic, and FINAL KNIGHT; social network games and mobile games, such as Ragnarok V: Returns, Ragnarok: The Lost Memories and Ragnrok Begins in-house; and web-browser-based games, such as Ragnarok Prequel and Ragnarok Prequel II. 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.

About 8X8

8×8, Inc. engages in the provision of enterprise communication solutions. It offers solutions to the business services, education, financial services, government, healthcare, and manufacturing industries. The company was founded in February 1987 and is headquartered in Campbell, CA.