Head-To-Head Comparison: Skillz (NYSE:SKLZ) and Take-Two Interactive Software (NASDAQ:TTWO)

Take-Two Interactive Software (NASDAQ:TTWO) and Skillz (NYSE:SKLZ) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Volatility & Risk

Take-Two Interactive Software has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Skillz has a beta of 4.58, indicating that its share price is 358% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Take-Two Interactive Software and Skillz, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Take-Two Interactive Software	1	1	15	1	2.89
Skillz	1	0	2	0	2.33

Take-Two Interactive Software currently has a consensus price target of $287.53, indicating a potential upside of 26.68%. Skillz has a consensus price target of $15.00, indicating a potential upside of 49.73%. Given Skillz’s higher probable upside, analysts plainly believe Skillz is more favorable than Take-Two Interactive Software.

Insider and Institutional Ownership

95.5% of Take-Two Interactive Software shares are held by institutional investors. Comparatively, 19.4% of Skillz shares are held by institutional investors. 1.3% of Take-Two Interactive Software shares are held by company insiders. Comparatively, 59.4% of Skillz shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Take-Two Interactive Software and Skillz”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Take-Two Interactive Software	$6.66 billion	6.33	-$298.20 million	($1.62)	-140.11
Skillz	$104.50 million	1.50	-$70.41 million	($3.48)	-2.88

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Take-Two Interactive Software	-4.48%	14.68%	5.22%
Skillz	-48.49%	-52.81%	-20.87%

Summary

Take-Two Interactive Software beats Skillz on 10 of the 15 factors compared between the two stocks.

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.

About Skillz

Skillz Inc. operates a mobile game platform in the United States and internationally. The company primarily develops and supports a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity to end-users. The company distributes games through direct app download from its website, as well as through third-party platforms. Skillz Inc. was founded in 2012 and is based in San Francisco, California.