Critical Survey: Brightcove (NASDAQ:BCOV) versus Gravity (NASDAQ:GRVY)

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

Valuation and Earnings

This table compares Gravity and Brightcove’s revenue, earnings per share (EPS) 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	4.66
Brightcove	$200.86 million	0.46	-$22.89 million	($0.22)	-9.36

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Gravity and Brightcove, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gravity	0	0	0	0	N/A
Brightcove	0	1	1	0	2.50

Brightcove has a consensus target price of $4.00, suggesting a potential upside of 94.17%. Given Brightcove’s higher possible upside, analysts clearly believe Brightcove is more favorable than Gravity.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gravity	14.87%	37.85%	30.67%
Brightcove	-4.28%	-8.86%	-3.88%

Institutional and Insider Ownership

9.9% of Gravity shares are held by institutional investors. Comparatively, 80.1% of Brightcove shares are held by institutional investors. 3.7% of Brightcove shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Gravity has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Brightcove has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Summary

Gravity beats Brightcove 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 Brightcove

Brightcove Inc. provides cloud-based streaming services the Americas, Europe, the Asia Pacific, Japan, India, and the Middle East. It offers Video Cloud, an online video streaming platform that enables its customers to publish, deliver, and distribute high-quality video to internet-connected devices. The company's solutions and products comprise Brightcove Marketing Studio, a video streaming solution; Brightcove Communications Studio for marketers and corporate communications professionals; Brightcove Media Studio, a solution for over-the-top (OTT) video services, media publishers, and leading broadcasters to monetize their media, live stream at scale, and nurture their audience lifecycle; Brightcove Audience Insights, a customer data platform for video streaming businesses; Zencoder, a cloud-based video encoding service; and Brightcove Beacon, a platform that enables its customers to launch premium OTT video streaming experiences, as well as Brightcove Marketplace. It also provides ad monetization; professional; customer success, support, and documentation; online and onsite training; and video.js and developer solutions. The company serves media companies, broadcasters, digital publishers, sports and entertainment companies, fashion and hospitality brands, faith-based institutions, retail and e-commerce businesses, and technology organizations, as well as government agencies, educational institutions, and non-profit organizations. Brightcove Inc. was incorporated in 2004 and is headquartered in Boston, Massachusetts.