Arco Platform (NASDAQ:ARCE) and China Online Education Group (NYSE:COE) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.
Volatility & Risk
Arco Platform has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, China Online Education Group has a beta of -0.85, meaning that its stock price is 185% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and price targets for Arco Platform and China Online Education Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Arco Platform | 0 | 0 | 3 | 0 | 3.00 |
| China Online Education Group | 0 | 0 | 1 | 0 | 3.00 |
Arco Platform currently has a consensus price target of $48.50, indicating a potential upside of 88.64%. China Online Education Group has a consensus price target of $36.00, indicating a potential upside of 80.18%. Given Arco Platform's higher probable upside, research analysts clearly believe Arco Platform is more favorable than China Online Education Group.
Profitability
This table compares Arco Platform and China Online Education Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Arco Platform | 4.51% | 4.00% | 1.99% |
| China Online Education Group | 6.06% | -12.27% | 6.86% |
Earnings & Valuation
This table compares Arco Platform and China Online Education Group's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Arco Platform | $139.21 million | 5.58 | $-2,390,000.00 | $0.49 | 52.47 |
| China Online Education Group | $213.08 million | 2.02 | $-15,000,000.00 | N/A | N/A |
Arco Platform has higher earnings, but lower revenue than China Online Education Group.
Institutional & Insider Ownership
93.2% of Arco Platform shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Summary
Arco Platform beats China Online Education Group on 8 of the 11 factors compared between the two stocks.
