Reviewing StoneCo (NASDAQ:STNE) & Gravity (NASDAQ:GRVY)

Gravity (NASDAQ:GRVY) and StoneCo (NASDAQ:STNE) 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, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gravity	16.96%	46.65%	36.71%
StoneCo	15.27%	13.17%	4.01%

Analyst Recommendations

This is a summary of current recommendations and price targets for Gravity and StoneCo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gravity	0	0	0	0	N/A
StoneCo	0	1	8	0	2.89

StoneCo has a consensus price target of $18.89, indicating a potential upside of 30.81%. Given StoneCo’s higher probable upside, analysts plainly believe StoneCo is more favorable than Gravity.

Earnings and Valuation

This table compares Gravity and StoneCo’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gravity	$564.42 billion	0.00	$105.61 million	$13.23	4.78
StoneCo	$2.41 billion	1.85	$318.89 million	$1.11	13.01

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

Institutional & Insider Ownership

9.9% of Gravity shares are held by institutional investors. Comparatively, 73.2% of StoneCo shares are held by institutional investors. 11.3% of StoneCo 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.

Volatility and Risk

Gravity has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, StoneCo has a beta of 2.32, meaning that its stock price is 132% more volatile than the S&P 500.

Summary

StoneCo beats Gravity on 8 of the 13 factors compared between the two stocks.

About Gravity

Gravity Co., Ltd. develops and publishes online and mobile games in South Korea, Taiwan, Thailand, and the United States. The company offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Prequel II. Its mobile games portfolio includes Ragnarok M: Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; and Paladog Tactics. The company 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; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin; and markets dolls, stationery, food, and other character-based merchandises, as well as game manuals, monthly magazines, and other publications. 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 StoneCo

StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and sells solutions to brick-and-mortar and digital merchants through sales team. The company served small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands.