GameStop (NYSE:GME) and Take-Two Interactive Software (NASDAQ:TTWO) Head to Head Contrast

GameStop (NYSE:GME) and Take-Two Interactive Software (NASDAQ:TTWO) are both large-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Risk and Volatility

GameStop has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500. Comparatively, Take-Two Interactive Software has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Profitability

This table compares GameStop and Take-Two Interactive Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GameStop	11.53%	12.47%	6.73%
Take-Two Interactive Software	-60.45%	17.73%	5.71%

Earnings and Valuation

This table compares GameStop and Take-Two Interactive Software”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GameStop	$3.63 billion	2.95	$418.40 million	$0.75	31.86
Take-Two Interactive Software	$5.63 billion	7.40	-$4.48 billion	($22.38)	-10.06

GameStop has higher earnings, but lower revenue than Take-Two Interactive Software. Take-Two Interactive Software is trading at a lower price-to-earnings ratio than GameStop, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for GameStop and Take-Two Interactive Software, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GameStop	1	1	0	0	1.50
Take-Two Interactive Software	1	1	16	1	2.89

GameStop presently has a consensus target price of $13.50, indicating a potential downside of 43.50%. Take-Two Interactive Software has a consensus target price of $284.31, indicating a potential upside of 26.26%. Given Take-Two Interactive Software’s stronger consensus rating and higher possible upside, analysts clearly believe Take-Two Interactive Software is more favorable than GameStop.

Institutional & Insider Ownership

29.2% of GameStop shares are owned by institutional investors. Comparatively, 95.5% of Take-Two Interactive Software shares are owned by institutional investors. 8.6% of GameStop shares are owned by insiders. Comparatively, 1.3% of Take-Two Interactive Software shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Take-Two Interactive Software beats GameStop on 8 of the 15 factors compared between the two stocks.

About GameStop

GameStop Corp., a specialty retailer, provides games and entertainment products through its stores and ecommerce platforms in the United States, Canada, Australia, and Europe. The company sells new and pre-owned gaming platforms; accessories, such as controllers, gaming headsets, and virtual reality products; new and pre-owned gaming software; and in-game digital currency, digital downloadable content, and full-game downloads. It sells collectibles comprising apparel, toys, trading cards, gadgets, and other retail products for pop culture and technology enthusiasts, as well as engages in the digital asset wallet and NFT marketplace activities. The company operates stores and ecommerce sites under the GameStop, EB Games, and Micromania brands; and pop culture themed stores that sell collectibles, apparel, gadgets, electronics, toys, and other retail products under the Zing Pop Culture brand, as well as offers Game Informer magazine, a print and digital gaming publication. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1996 and is headquartered in Grapevine, Texas.

About Take-Two Interactive Software

Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment solutions for consumers worldwide. It develops and publishes action/adventure products under the Grand Theft Auto, LA Noire, Max Payne, Midnight Club, and Red Dead Redemption names, as well as other franchises. The company also publishes various entertainment properties across various platforms and a range of genres, such as shooter, action, role-playing, strategy, sports, and family/casual entertainment under the BioShock, Mafia, Sid Meier’s Civilization, XCOM series, Borderlands, and Tiny Tina’s Wonderland names. In addition, it publishes sports simulation titles comprising NBA 2K series, a basketball video game; the WWE 2K professional wrestling series; mobile titles, including WWE SuperCard; and PGA TOUR 2K. Further, the company offers Kerbal Space Program and OlliOlli World; free-to-play mobile games, such as CSR Racing, Dragon City, Empires & Puzzles, FarmVille, Golf Rival, Harry Potter: Puzzles & Spells, Match Factory!, Merge Dragons!, Merge Magic!, Monster Legends, Toon Blast, Top Eleven, Top Troops, Toy Blast, Two Dots, Words With Friends, and Zynga Poker; and hyper-casual mobile titles, including Fill the Fridge!, Parking Jam 3D, Power Slap, Pull the Pin, Twisted Tangle, and Tangled Snakes. Its products are designed for console gaming systems; personal computers; and mobiles comprising smartphones and tablets. The company provides its products through physical retail, digital download, online platforms, and cloud streaming services. Take-Two Interactive Software, Inc. was incorporated in 1993 and is based in New York, New York.