Comparing Grom Social Enterprises (NASDAQ:GROM) and DigitalOcean (NASDAQ:DOCN)

Grom Social Enterprises (NASDAQ:GROM – Get Rating) and DigitalOcean (NASDAQ:DOCN – Get Rating) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Risk and Volatility

Grom Social Enterprises has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500. Comparatively, DigitalOcean has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Grom Social Enterprises and DigitalOcean, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grom Social Enterprises	0	0	1	0	3.00
DigitalOcean	2	4	6	0	2.33

Grom Social Enterprises presently has a consensus price target of $1.50, suggesting a potential upside of 158.62%. DigitalOcean has a consensus price target of $40.54, suggesting a potential upside of 18.95%. Given Grom Social Enterprises’ stronger consensus rating and higher probable upside, analysts plainly believe Grom Social Enterprises is more favorable than DigitalOcean.

Institutional & Insider Ownership

52.0% of DigitalOcean shares are owned by institutional investors. 0.5% of Grom Social Enterprises shares are owned by insiders. Comparatively, 4.1% of DigitalOcean shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Grom Social Enterprises and DigitalOcean’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grom Social Enterprises	-214.31%	-45.14%	-32.19%
DigitalOcean	-4.21%	-2.36%	-0.19%

Earnings and Valuation

This table compares Grom Social Enterprises and DigitalOcean’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grom Social Enterprises	$6.30 million	0.48	-$10.15 million	N/A	N/A
DigitalOcean	$576.32 million	5.73	-$24.28 million	($0.23)	-148.17

Grom Social Enterprises has higher earnings, but lower revenue than DigitalOcean.

Summary

DigitalOcean beats Grom Social Enterprises on 8 of the 12 factors compared between the two stocks.

About Grom Social Enterprises

(Get Rating)

Grom Social Enterprises, Inc. owns and operates social media platform for kids. It also offers animation, network monitoring and security solutions, nutritional services, and mobile parenting application through its subsidiaries. The company was founded by Zach Marks on October 6, 2009 and is headquartered in Boca Raton, FL.

About DigitalOcean

(Get Rating)

DigitalOcean Holdings, Inc., through its subsidiaries, operates a cloud computing platform in North America, Europe, Asia, and internationally. Its platform provides on-demand infrastructure and platform tools for developers, start-ups, and small and medium size businesses. The company offers infrastructure solutions across compute, storage, and networking, as well as enables developers to extend the native capabilities of its cloud with fully managed application, container, and database offerings. Its users include software engineers, researchers, data scientists, system administrators, students, and hobbyists. The company's customers use its platform in various industry verticals and for a range of use cases, such as web and mobile applications, website hosting, e-commerce, media and gaming, personal web projects, managed services, and others. DigitalOcean Holdings, Inc. was incorporated in 2012 and is headquartered in New York, New York.