Analyzing Toast (NYSE:TOST) & Gravity (NASDAQ:GRVY)

Toast (NYSE:TOST) and Gravity (NASDAQ:GRVY) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Valuation and Earnings

This table compares Toast and Gravity’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toast	$3.87 billion	3.04	-$246.00 million	($0.50)	-51.86
Gravity	$555.74 million	0.98	$105.61 million	$13.23	5.94

Gravity has lower revenue, but higher earnings than Toast. Toast is trading at a lower price-to-earnings ratio than Gravity, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Toast and Gravity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toast	-6.02%	-21.45%	-12.99%
Gravity	16.96%	46.65%	36.71%

Institutional & Insider Ownership

82.9% of Toast shares are owned by institutional investors. Comparatively, 9.9% of Gravity shares are owned by institutional investors. 13.3% of Toast shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Toast and Gravity, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toast	1	10	9	0	2.40
Gravity	0	0	0	0	N/A

Toast presently has a consensus price target of $26.05, indicating a potential upside of 0.46%. Given Toast’s higher probable upside, equities analysts clearly believe Toast is more favorable than Gravity.

Risk and Volatility

Toast has a beta of 1.76, indicating that its stock price is 76% more volatile than the S&P 500. Comparatively, Gravity has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.

Summary

Toast beats Gravity on 7 of the 13 factors compared between the two stocks.

About Toast

Toast, Inc. operates a cloud-based digital technology platform for the restaurant industry in the United States, Ireland, and India. The company offers software products for restaurant operations and point of sale, such as Toast POS, Toast now, multi-location management, kitchen display system, Toast mobile order and pay, Toast catering and events, Toast invoicing, Toast tables, and restaurant retail; and hardware products, including Toast flex, Toast flex for guest, Toast go 2, Toast tap, kiosks, and Delphi by Toast. It provides toast online ordering and toast takeout, first-party delivery toast delivery services, and third-party delivery integrations and orders hub; and loyalty, email marketing, and toast gift cards. In addition, the company offers payroll and team management, Sling by Toast, Toast pay card and payout, and tips manager, as well as partner-enabled products comprising insurance and benefits; supply chain and accounting products, such as xtraCHEF by toast; and financial technology solutions consisting of payment processing, toast capital, and purchase plans. Further, it offers reporting and analytics, Toast shop, and Toast partner connect and application programming interfaces. The company was formerly known as Opti Systems, Inc. and changed its name to Toast, Inc. in May 2012. Toast, Inc. was incorporated in 2011 and is headquartered in Boston, Massachusetts.

About Gravity

Gravity Co., Ltd. develops and publishes online and mobile games in South Korea, Taiwan, Thailand, and the United States. The company offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Prequel II. Its mobile games portfolio includes Ragnarok M: Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; and Paladog Tactics. The company also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin; and markets dolls, stationery, food, and other character-based merchandises, as well as game manuals, monthly magazines, and other publications. Further, the company provides system development and maintenance services, as well as system integration services to third parties. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.