Heritage Global Inc. (HGBL) vs The9 Limited (NCTY)

Heritage Global Inc. and The9 Limited are both Capital Markets companies. The9 Limited is the larger, with a market value of $53.8M against $46.1M — 1.2× the size. Heritage Global Inc. has negative trailing earnings, so its P/E is not meaningful; The9 Limited trades at 1.8×. Heritage Global Inc. grew revenue faster over the last twelve months: −1.50% against −8.79%. Heritage Global Inc. has the higher net margin (−29.6% vs −152.8%) and the lower return on invested capital (−26.0% vs 0.00%). Across the 19 metrics below, Heritage Global Inc. leads on 12 and The9 Limited on 7.

Valuation

Metric HGBL NCTY Capital Markets median
P/E n/m 1.77 15.78
P/S 0.96 438.78 2.32
P/B 0.89 134.97 1.89
Price to free cash flow n/m n/m 6.25
EV/EBITDA n/m n/m 8.87
EV/Sales 0.77 435.48 2.28
Earnings yield (30.83%) 56.52% (3.77%)
Free cash flow yield (2.38%) (1.14%) (1.49%)

Profitability

Metric HGBL NCTY Capital Markets median
Gross margin 64.83% (32.19%) 62.80%
Operating margin (36.98%) 0.00% 0.00%
Net margin (29.63%) (152.80%) (0.55%)
Free cash flow margin (2.27%) (424.18%) 0.00%
Return on equity (24.29%) (133.93%) 0.00%
Return on assets (18.08%) (41.27%) 0.00%
Return on invested capital (26.01%) 0.00% 0.00%

Growth

Metric HGBL NCTY Capital Markets median
Revenue growth (TTM) (1.50%) (8.79%) 21.02%
EPS growth (last fiscal year) (28.57%) (318.60%) —
Revenue growth, 5-year CAGR 14.25% 176.25% 18.16%
Net income growth, 5-year CAGR (17.97%) 0.00% 0.00%

Health

Metric HGBL NCTY Capital Markets median
Debt to equity 0.08 0.35 0.08
Current ratio 1.69 2.57 1.51
Net debt to EBITDA (2.39) 0.33 (0.24)

Dividend

Metric HGBL NCTY Capital Markets median
Dividend yield — — 2.20%
Payout ratio 0.00 0.00 0.00

Size

Metric HGBL NCTY Capital Markets median
Market cap 46.07m 53.76m 724.58m

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