Reddit (NYSE:RDDT) and Square Enix (OTCMKTS:SQNXF) Critical Comparison

Reddit (NYSE:RDDT) and Square Enix (OTCMKTS:SQNXF) are both communication services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Profitability

This table compares Reddit and Square Enix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reddit	31.35%	29.02%	26.32%
Square Enix	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of recent ratings and price targets for Reddit and Square Enix, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	0	11	18	2	2.71
Square Enix	0	0	0	1	4.00

Reddit currently has a consensus target price of $221.10, indicating a potential upside of 40.05%. Given Reddit’s higher probable upside, equities research analysts clearly believe Reddit is more favorable than Square Enix.

Risk and Volatility

Reddit has a beta of 2.02, meaning that its stock price is 102% more volatile than the S&P 500. Comparatively, Square Enix has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Earnings & Valuation

This table compares Reddit and Square Enix”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reddit	$2.20 billion	13.79	$529.72 million	$4.30	36.72
Square Enix	$1.98 billion	3.33	$195.47 million	$0.75	24.33

Reddit has higher revenue and earnings than Square Enix. Square Enix is trading at a lower price-to-earnings ratio than Reddit, indicating that it is currently the more affordable of the two stocks.

Summary

Reddit beats Square Enix on 12 of the 13 factors compared between the two stocks.

About Reddit

Reddit, Inc. operates a website that organizes digital communities. It organizes communities based on specific interests that enable users to engage in conversations by sharing experiences, submitting links, uploading images and videos, and replying to one another. The company was founded in 2005 and is headquartered in San Francisco, California.

About Square Enix

Square Enix Holdings Co., Ltd. operates in the content and service businesses in Japan and internationally. It operates through Digital Entertainment Business, Amusement Business, Publishing Business, and Rights Property Business. The company plans, develops, sells, and manages digital entertainment content primarily in the form of computer games. It is also involved in the operation of amusement facilities; and planning, development, manufacture, sale, and rental of arcade game machines and related products for amusement facilities. In addition, the company publishes and licenses comic books, magazines, game-related books, periodicals, etc. Further, it plans, produces, distributes, and licenses secondary works; and offers content under the SQUARE ENIX PRODUCTS brand; and stuffed toys and utility goods under the SQEX TOYS brand. The company was incorporated in 1975 and is headquartered in Tokyo, Japan.