Comparing DoubleDown Interactive (NASDAQ:DDI) & Gravity (NASDAQ:GRVY)

DoubleDown Interactive (NASDAQ:DDI) and Gravity (NASDAQ:GRVY) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DoubleDown Interactive	34.85%	15.62%	14.27%
Gravity	14.87%	37.85%	30.67%

Earnings & Valuation

This table compares DoubleDown Interactive and Gravity”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DoubleDown Interactive	$308.86 million	2.10	$100.89 million	$2.15	6.10
Gravity	$555.74 million	0.77	$105.61 million	$13.23	4.64

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

Risk and Volatility

DoubleDown Interactive has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Gravity has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.

Insider and Institutional Ownership

9.9% of Gravity shares are owned by institutional investors. 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for DoubleDown Interactive and Gravity, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DoubleDown Interactive	0	0	4	0	3.00
Gravity	0	0	0	0	N/A

DoubleDown Interactive currently has a consensus target price of $20.08, suggesting a potential upside of 53.19%. Given DoubleDown Interactive’s higher possible upside, equities research analysts plainly believe DoubleDown Interactive is more favorable than Gravity.

Summary

Gravity beats DoubleDown Interactive on 7 of the 12 factors compared between the two stocks.

About DoubleDown Interactive

DoubleDown Interactive Co., Ltd. engages in the development and publishing of casual games and mobile applications in South Korea. It publishes digital gaming content on mobile and web platforms. The company offers DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox, and cash me out games, as well as sells in-game virtual chips. Its games are primarily distributed, marketed, and promoted through third party platform providers. The company was formerly known as The8Games Co., Ltd. and changed its name to DoubleDown Interactive Co., Ltd. in December 2019. The company was incorporated in 2008 and is headquartered in Seoul, South Korea. DoubleDown Interactive Co., Ltd. is a subsidiary of DoubleU Games Co., Ltd.

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.