Analyzing Bitfarms (NASDAQ:BITF) & The9 (NASDAQ:NCTY)

Bitfarms (NASDAQ:BITF) and The9 (NASDAQ:NCTY) are both small-cap business services companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Bitfarms and The9, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bitfarms	0	1	6	0	2.86
The9	0	0	0	0	0.00

Bitfarms currently has a consensus target price of $4.05, indicating a potential upside of 264.86%. Given Bitfarms’ stronger consensus rating and higher possible upside, equities analysts clearly believe Bitfarms is more favorable than The9.

Valuation & Earnings

This table compares Bitfarms and The9″s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bitfarms	$182.96 million	2.91	-$104.04 million	($0.36)	-3.08
The9	$176.49 million	0.59	$2.82 million	N/A	N/A

The9 has lower revenue, but higher earnings than Bitfarms.

Profitability

This table compares Bitfarms and The9’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bitfarms	-69.08%	-22.17%	-18.93%
The9	N/A	N/A	N/A

Volatility & Risk

Bitfarms has a beta of 3.68, indicating that its share price is 268% more volatile than the S&P 500. Comparatively, The9 has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500.

Insider and Institutional Ownership

20.6% of Bitfarms shares are owned by institutional investors. Comparatively, 0.5% of The9 shares are owned by institutional investors. 9.5% of Bitfarms shares are owned by insiders. Comparatively, 30.8% of The9 shares are owned 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.

Summary

Bitfarms beats The9 on 7 of the 12 factors compared between the two stocks.

About Bitfarms

Bitfarms Ltd. engages in the mining of cryptocurrency coins and tokens in Canada, the United States, Paraguay, and Argentina. It owns and operates server farms that primarily validates transactions on the Bitcoin Blockchain and earning cryptocurrency from block rewards and transaction fees. The company also provides electrician services to commercial and residential customers in Quebec, Canada. It also undertakes hosting of third-party mining hardware. The company was founded in 2017 and is based in Toronto, Canada.

About The9

The9 Limited operates as a cryptocurrency mining business in China, Eastern Europe, Asia, and North America. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was incorporated in 1999 and is headquartered in Shanghai, the People’s Republic of China.