Critical Review: Phunware (NASDAQ:PHUN) and DoubleDown Interactive (NASDAQ:DDI)

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

Valuation and Earnings

This table compares DoubleDown Interactive and Phunware”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DoubleDown Interactive	$308.86 million	2.49	$100.89 million	$2.30	6.75
Phunware	$4.83 million	18.35	-$52.78 million	N/A	N/A

DoubleDown Interactive has higher revenue and earnings than Phunware.

Analyst Ratings

This is a summary of recent ratings and recommmendations for DoubleDown Interactive and Phunware, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DoubleDown Interactive	0	0	4	0	3.00
Phunware	0	1	2	0	2.67

DoubleDown Interactive currently has a consensus price target of $22.67, suggesting a potential upside of 46.05%. Phunware has a consensus price target of $13.00, suggesting a potential upside of 191.81%. Given Phunware’s higher probable upside, analysts clearly believe Phunware is more favorable than DoubleDown Interactive.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DoubleDown Interactive	33.28%	14.78%	13.54%
Phunware	-867.61%	-244.22%	-119.14%

Insider and Institutional Ownership

7.6% of Phunware shares are held by institutional investors. 1.2% of Phunware shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

DoubleDown Interactive has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Phunware has a beta of 2.39, suggesting that its share price is 139% more volatile than the S&P 500.

Summary

DoubleDown Interactive beats Phunware on 7 of the 12 factors compared between the two stocks.

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.

About Phunware

Phunware, Inc., together with its subsidiaries, provides integrated software platform that equips companies with the products, solutions, and services to engage, manage, and monetize their mobile application portfolios in the United States and internationally. The company's products and services include mobile software and application transaction solutions comprise integration of software development kit (SDK) licenses, which consists of analytics that offers data related to application use and engagement; content management that allows application administrators to create and manage app content in a cloud-based portal; alerts, notifications, and messaging, which enables brands to send messages; marketing automation that enables location-triggered messages and workflow; advertising; and location-based services, such as mapping, navigation, wayfinding, workflow, asset management, and policy enforcement. It is also involved in the integration of its SDK licenses into existing applications maintained by its customers, as well as custom application development and support services; and provision of cloud-based vertical solutions for healthcare, retail, sports, aviation, real estate, hospitality, education, and other applications, as well as application transactions, including re-occurring and one-time transactional media purchases for application discovery, user acquisition and audience building, audience engagement, and audience monetization. Phunware, Inc. was founded in 2009 and is headquartered in Austin, Texas.