Analyzing Vimeo (NASDAQ:VMEO) & GDS (NASDAQ:GDS)

Vimeo (NASDAQ:VMEO – Get Rating) and GDS (NASDAQ:GDS – Get Rating) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.

Profitability

This table compares Vimeo and GDS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vimeo	-18.38%	-18.09%	-10.48%
GDS	-17.87%	-6.84%	-2.20%

Valuation & Earnings

This table compares Vimeo and GDS’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vimeo	$433.03 million	1.32	-$79.59 million	($0.48)	-7.15
GDS	$1.23 billion	2.36	-$184.02 million	($1.39)	-11.17

Vimeo has higher earnings, but lower revenue than GDS. GDS is trading at a lower price-to-earnings ratio than Vimeo, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Vimeo and GDS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vimeo	0	1	1	0	2.50
GDS	0	5	3	0	2.38

Vimeo presently has a consensus target price of $6.06, indicating a potential upside of 76.75%. GDS has a consensus target price of $38.11, indicating a potential upside of 145.55%. Given GDS’s higher possible upside, analysts plainly believe GDS is more favorable than Vimeo.

Insider and Institutional Ownership

83.9% of Vimeo shares are held by institutional investors. Comparatively, 42.6% of GDS shares are held by institutional investors. 20.3% of Vimeo shares are held by company insiders. Comparatively, 8.0% of GDS shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Vimeo has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500. Comparatively, GDS has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

About Vimeo

(Get Rating)

Vimeo, Inc., together with its subsidiaries, provides video software solutions in New York and internationally. The company provides the video tools through a software-as-a-service model, which enables its users to create, collaborate, and communicate with video on a single platform. It also offers over-the-top OTT streaming and monetization services; AI-driven video creation and editing tools; and interactive and shoppable video tools. It serves creative professionals, small businesses, marketers, agencies, schools, nonprofits, and large organizations. The company was incorporated in 2020 and is headquartered in New York, New York.

About GDS

(Get Rating)

GDS Holdings Ltd. engages in developing and operating data centers in China. It builds, operates, and transfers data centers at other locations. Its data centers are carrier and cloud-neutral, which enable customers to connect to major telecommunications carriers, and to access a number of cloud service providers. The firm also offers colocation and managed services, which include direct private connection to major public cloud platforms. The company was founded by William Huang and Wei Huang in 2001 and is headquartered in Pudong, China.