Critical Contrast: Electronic Arts (NASDAQ:EA) and Rush Street Interactive (NYSE:RSI)

Electronic Arts (NASDAQ:EA) and Rush Street Interactive (NYSE:RSI) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitability.

Profitability

This table compares Electronic Arts and Rush Street Interactive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Electronic Arts	11.78%	23.41%	11.71%
Rush Street Interactive	2.98%	17.21%	8.00%

Analyst Recommendations

This is a summary of recent ratings for Electronic Arts and Rush Street Interactive, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Electronic Arts	2	14	2	0	2.00
Rush Street Interactive	0	3	9	1	2.85

Electronic Arts presently has a consensus target price of $201.42, suggesting a potential downside of 3.60%. Rush Street Interactive has a consensus target price of $35.11, suggesting a potential upside of 28.19%. Given Rush Street Interactive’s stronger consensus rating and higher probable upside, analysts plainly believe Rush Street Interactive is more favorable than Electronic Arts.

Risk & Volatility

Electronic Arts has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Rush Street Interactive has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.

Institutional & Insider Ownership

90.2% of Electronic Arts shares are owned by institutional investors. Comparatively, 24.8% of Rush Street Interactive shares are owned by institutional investors. 0.2% of Electronic Arts shares are owned by company insiders. Comparatively, 52.9% of Rush Street Interactive shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Electronic Arts and Rush Street Interactive”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Electronic Arts	$7.53 billion	6.96	$887.00 million	$3.49	59.86
Rush Street Interactive	$1.13 billion	5.62	$33.31 million	$0.31	88.35

Electronic Arts has higher revenue and earnings than Rush Street Interactive. Electronic Arts is trading at a lower price-to-earnings ratio than Rush Street Interactive, indicating that it is currently the more affordable of the two stocks.

Summary

Electronic Arts beats Rush Street Interactive on 8 of the 15 factors compared between the two stocks.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It develops and publishes games and services across various genres, such as sports, racing, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Need for Speed, and license games from others, including FIFA, Madden NFL, UFC, and Star Wars brands. The company licenses its games to third parties to distribute and host its games. It markets and sells its games and services through digital distribution and retail channels, as well as directly to mass market retailers, specialty stores, and distribution arrangements. Electronic Arts Inc. was incorporated in 1982 and is headquartered in Redwood City, California.

About Rush Street Interactive

Rush Street Interactive, Inc. operates as an online casino and sports betting company in the United States, Canada, Mexico, and rest of Latin America. It provides real-money online casino, online and retail sports betting, and social gaming services. In addition, the company offers full suite of games comprising of bricks-and-mortar casinos, table games, and slot machines. The company markets its online casino and sports betting under BetRivers, PlaySugarHouse, and RushBet brands. Rush Street Interactive, Inc. was founded in 2012 and is headquartered in Chicago, Illinois.