Critical Review: Applied Digital (NASDAQ:APLD) versus So-Young International (NASDAQ:SY)

So-Young International (NASDAQ:SY) and Applied Digital (NASDAQ:APLD) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Volatility & Risk

So-Young International has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Applied Digital has a beta of 4.78, indicating that its stock price is 378% more volatile than the S&P 500.

Profitability

This table compares So-Young International and Applied Digital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
So-Young International	2.41%	1.41%	1.11%
Applied Digital	-74.95%	-88.87%	-20.16%

Institutional and Insider Ownership

35.3% of So-Young International shares are held by institutional investors. Comparatively, 65.7% of Applied Digital shares are held by institutional investors. 16.7% of So-Young International shares are held by insiders. Comparatively, 11.8% of Applied Digital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for So-Young International and Applied Digital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
So-Young International	0	1	0	0	2.00
Applied Digital	0	0	7	0	3.00

So-Young International currently has a consensus price target of $0.80, indicating a potential downside of 9.62%. Applied Digital has a consensus price target of $11.14, indicating a potential upside of 34.41%. Given Applied Digital’s stronger consensus rating and higher possible upside, analysts clearly believe Applied Digital is more favorable than So-Young International.

Valuation and Earnings

This table compares So-Young International and Applied Digital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
So-Young International	$1.49 billion	0.07	$3.00 million	$0.05	17.70
Applied Digital	$189.96 million	9.22	-$149.27 million	($1.17)	-7.09

So-Young International has higher revenue and earnings than Applied Digital. Applied Digital is trading at a lower price-to-earnings ratio than So-Young International, indicating that it is currently the more affordable of the two stocks.

Summary

So-Young International beats Applied Digital on 8 of the 14 factors compared between the two stocks.

About So-Young International

So-Young International Inc. operates an online platform for consumption healthcare services in the People's Republic of China. The company offers So-Young Mobile App that offers users medical aesthetic knowledge and experience to reach an informed medical aesthetic treatment decision and make reservations for treatment with medical professionals and medical aesthetic institutions; So-Young Beauty which provides similar interfaces and functions as the mobile app, as well as serves as additional access points to the platform; and medical aesthetic community content through its website soyoung.com. It provides content in various media formats on its online platform generated by users, including professional generated, content from in-house editorial team that shares opinions on specific new medical procedures and trends; user generated content comprising Beauty Diaries that provides details about medical institution, doctor, price, and other information on the treatment; professional user generated, contents from the medical aesthetic influencers; and doctor generated, content from doctors to generate knowledge. In addition, the company offers consumption healthcare services, including dermatology, dentistry and orthodontics, physical examinations, gynecology, and postnatal care; reservation services; and software as a service. Further, it engages in research and development, production, sales, and agency of laser and other optoelectronic medical beauty equipment; manufacture and sells light therapy device, surgical laser device and other equipment; internet information and technology advisory; online medical treatment and consultation; management consulting; internet culture; micro finance services, as well as sells cosmetics products. The company was founded in 2013 and is headquartered in Beijing, China.

About Applied Digital

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.