LN - Better Buy: Facebook vs. Line Corp
In a battle for eyeballs and daily active users, Facebook (NASDAQ: FB) and Line Corp (NYSE: LN) are two intriguing options for tech investors to consider. While Facebook is the much more established brand, it's also facing many challenges ahead, and Line Corp may have a lot more room to grow. But let's take a closer look at how these companies have performed recently to see which one is the better buy today.
Japanese-based Line Corp offers investors the ability to get in on what's still a fairly small-sized tech stock, with a market cap of a little more than $9 billion. In the mobile messaging company's most recent quarter, sales were up by just 10.6% year over year, with advertising revenues being a key driver in that. The concern for investors, however, is that the company's other segments, while they offer some diversification, haven't delivered much in the way of growth. Content is the next-biggest piece of the company's sales behind ads and it was flat from the prior year, as were communication revenues.
Line Corp's app has shown strong growth over the past year as shopping transactions have increased by 83%. However, its monthly active users have declined from 165 million to 164 million and its operating margin -- what the company has left over after its operating expenses -- fell to a negative 9.9%.