Head-To-Head Comparison: Sound Group (NASDAQ:SOGP) versus GDS (NASDAQ:GDS)

GDS (NASDAQ:GDS) and Sound Group (NASDAQ:SOGP) are both small-cap business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for GDS and Sound Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GDS	0	2	2	0	2.50
Sound Group	0	0	0	0	N/A

GDS currently has a consensus price target of $12.58, indicating a potential upside of 23.97%. Given GDS’s higher probable upside, equities research analysts plainly believe GDS is more favorable than Sound Group.

Insider and Institutional Ownership

33.7% of GDS shares are held by institutional investors. Comparatively, 1.6% of Sound Group shares are held by institutional investors. 8.0% of GDS shares are held by insiders. Comparatively, 25.2% of Sound Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GDS	-41.33%	-8.70%	-2.35%
Sound Group	N/A	N/A	N/A

Valuation & Earnings

This table compares GDS and Sound Group’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GDS	$1.40 billion	1.38	-$606.18 million	($3.21)	-3.16
Sound Group	$316.83 million	0.03	$12.54 million	$0.99	2.16

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

Volatility and Risk

GDS has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, Sound Group has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500.

Summary

Sound Group beats GDS on 8 of the 13 factors compared between the two stocks.

About GDS

GDS Holdings Limited, together with its subsidiaries, develops and operates data centers in the People's Republic of China. The company provides colocation services comprising critical facilities space, customer-available power, racks, and cooling; managed hosting services, including business continuity and disaster recovery, network management, data storage, system security, operating system, database, and server middleware services; managed cloud services; and consulting services. It serves cloud service providers, large Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. GDS Holdings Limited was founded in 2001 and is headquartered in Shanghai, the People's Republic of China.

About Sound Group

Sound Group Inc. operates as an audio-centric social and entertainment company. It focuses on building audio platform to connect and communicate. The company, through its product portfolio and in-house technologies, caters to user interest in audio entertainment and social networking. The company was formerly known as LIZHI INC. and changed its name to Sound Group Inc. in January 2024. Sound Group Inc. was founded in 2010 and is based in Singapore.