Comparing DoubleDown Interactive (NASDAQ:DDI) and Applied Digital (NASDAQ:APLD)

Applied Digital (NASDAQ:APLD) and DoubleDown Interactive (NASDAQ:DDI) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Applied Digital	-74.95%	-88.87%	-20.16%
DoubleDown Interactive	33.28%	14.78%	13.54%

Earnings & Valuation

This table compares Applied Digital and DoubleDown Interactive”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Digital	$189.96 million	10.05	-$149.27 million	($1.17)	-7.72
DoubleDown Interactive	$342.46 million	1.76	$100.89 million	$2.30	5.28

DoubleDown Interactive has higher revenue and earnings than Applied Digital. Applied Digital 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

Applied Digital has a beta of 4.67, meaning that its share price is 367% more volatile than the S&P 500. Comparatively, DoubleDown Interactive has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Institutional and Insider Ownership

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

Analyst Ratings

This is a breakdown of current ratings for Applied Digital and DoubleDown Interactive, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Digital	0	0	6	0	3.00
DoubleDown Interactive	0	0	4	0	3.00

Applied Digital presently has a consensus price target of $10.50, suggesting a potential upside of 16.21%. DoubleDown Interactive has a consensus price target of $22.67, suggesting a potential upside of 86.71%. Given DoubleDown Interactive’s higher possible upside, analysts plainly believe DoubleDown Interactive is more favorable than Applied Digital.

Summary

DoubleDown Interactive beats Applied Digital on 8 of the 13 factors compared between the two stocks.

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.

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.