Critical Review: Black Knight (BKI) versus Cheetah Mobile (…


Cheetah Mobile (NYSE:CMCM) and Black Knight (NYSE:BKI) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Volatility and Risk

Cheetah Mobile has a beta of 2.44, indicating that its stock price is 144% more volatile than the S&P 500. Comparatively, Black Knight has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Institutional and Insider Ownership

5.4% of Cheetah Mobile shares are owned by institutional investors. Comparatively, 86.0% of Black Knight shares are owned by institutional investors. 17.1% of Cheetah Mobile shares are owned by company insiders. Comparatively, 14.4% of Black Knight shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Cheetah Mobile and Black Knight’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cheetah Mobile 29.78% 31.36% 20.25%
Black Knight 24.90% 13.86% 6.41%

Valuation & Earnings

This table compares Cheetah Mobile and Black Knight’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cheetah Mobile $764.61 million 1.23 $207.21 million N/A N/A
Black Knight $1.05 billion 6.90 $182.30 million $1.32 36.81

Cheetah Mobile has higher earnings, but lower revenue than Black Knight.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Cheetah Mobile and Black Knight, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cheetah Mobile 1 1 1 0 2.00
Black Knight 0 1 9 0 2.90

Cheetah Mobile presently has a consensus target price of $13.00, indicating a potential upside of 98.47%. Black Knight has a consensus target price of $55.72, indicating a potential upside of 14.66%. Given Cheetah Mobile’s higher possible upside, analysts plainly believe Cheetah Mobile is more favorable than Black Knight.

Summary

Cheetah Mobile beats Black Knight on 7 of the 13 factors compared between the two stocks.

Cheetah Mobile Company Profile

Cheetah Mobile Inc. operates as a mobile Internet company worldwide. The company’s utility products include Clean Master, a junk file cleaning, memory boosting, and privacy protection tool for mobile devices; Security Master, an anti-virus and security application for mobile devices; Battery Doctor, a power optimization tool for mobile devices; Cheetah Browser, a Web browser for PCs and mobile devices; CM Browser, a mobile browser to protect users from malicious threats; and CM Launcher, which provides personalized experience in using smart phones. Its utility products also comprise Cheetah Keyboard, an artificial intelligence (AI)-enabled application; Photo Grid, a photo collage application for mobile devices; CM Locker, a lock screen with notifications and security; Duba Anti-virus, an Internet security application for PC and mobile devices; and SafeWallet, a mobile digital wallet. In addition, the company offers Live.me, a live video streaming application; and Cheez, an interactive short video application. Further, it provides mobile games comprising Piano Tiles 2, Rolling Sky, Dancing Line, Arrow.io, Tap Tap Fish, and Tap Tap Dash; and Cheetah Voicepod, an AI-based smart speaker. Additionally, the company offers mobile advertising platform; duba.com personal start page that aggregates online resources and provides users access to their online destinations; and cloud-based data analytics engines, as well as mobile advertising, and Web and mobile games publisher services. It serves direct advertisers that include mobile application developers, mobile game developers, and e-commerce companies, as well as search engines and partnering mobile advertising networks. The company was formerly known as Kingsoft Internet Software Holdings Limited and changed its name to Cheetah Mobile Inc. in March 2014. Cheetah Mobile Inc. was incorporated in 2009 and is headquartered in Beijing, People’s Republic of China.

Black Knight Company Profile

Black Knight, Inc. provides software, data, and analytics solutions to the mortgage and consumer loan, real estate, and capital market verticals primarily in the United States. It operates through two segments, Software Solutions, and Data and Analytics. The Software Solutions segment offers software and hosting solutions, including LoanSphere mortgage servicing platform, a software as a service application that automates loan servicing to the secondary mortgage market and investor reporting; and LoanSphere Bankruptcy and LoanSphere Foreclosure solutions, which are Web-based workflow information systems for managing and automating a range of workflow processes involving non-performing loans. It also provides LoanSphere Invoicing to organize images of paper documents within a particular file, capture information from imaged documents, manage invoices, and offer various users access to data needed for monitoring and process management. In addition, this segment provides LoanSphere Empower, which supports retail and wholesale loan originations; LoanSphere LendingSpace that supports correspondent loan originations; LoanSphere Exchange, a platform, which offers interconnected network of originators, agents, settlement services providers, and investors; Insight suite of solutions designed to help lenders meet loan quality and disclosure requirements; and eLending platform, which hosts a range of on-demand services that provide electronic document delivery, signature, closings, and post-close services accessible to lenders. The Data and Analytics segment offers services consisting of property, mortgage performance data, and multiple listing service; mortgage and real estate analytics; and enterprise business intelligence. The company was formerly known as Black Knight Financial Services, Inc. and changed its name to Black Knight, Inc. in October 2017. Black Knight, Inc. was founded in 2013 and is headquartered in Jacksonville, Florida.

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