TAKE-TWO INTERACTIVE SOFTWARE (NASDAQ:TTWO) versus Adobe (NASDAQ:ADBE) Head to Head Review

TAKE-TWO INTERACTIVE SOFTWARE (NASDAQ:TTWO) and Adobe (NASDAQ:ADBE) are both large-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Profitability

This table compares TAKE-TWO INTERACTIVE SOFTWARE and Adobe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TAKE-TWO INTERACTIVE SOFTWARE 11.14% 26.81% 12.55%
Adobe 26.10% 30.49% 15.40%

Valuation & Earnings

This table compares TAKE-TWO INTERACTIVE SOFTWARE and Adobe’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TAKE-TWO INTERACTIVE SOFTWARE $2.67 billion 5.10 $333.84 million $3.88 30.94
Adobe $9.03 billion 16.46 $2.59 billion $5.55 55.32

Adobe has higher revenue and earnings than TAKE-TWO INTERACTIVE SOFTWARE. TAKE-TWO INTERACTIVE SOFTWARE is trading at a lower price-to-earnings ratio than Adobe, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

91.0% of TAKE-TWO INTERACTIVE SOFTWARE shares are held by institutional investors. Comparatively, 84.9% of Adobe shares are held by institutional investors. 1.2% of TAKE-TWO INTERACTIVE SOFTWARE shares are held by company insiders. Comparatively, 0.3% of Adobe shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

TAKE-TWO INTERACTIVE SOFTWARE has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Adobe has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for TAKE-TWO INTERACTIVE SOFTWARE and Adobe, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TAKE-TWO INTERACTIVE SOFTWARE 0 4 18 0 2.82
Adobe 0 11 13 0 2.54

TAKE-TWO INTERACTIVE SOFTWARE currently has a consensus price target of $134.04, indicating a potential upside of 11.65%. Adobe has a consensus price target of $305.13, indicating a potential downside of 0.63%. Given TAKE-TWO INTERACTIVE SOFTWARE’s stronger consensus rating and higher probable upside, equities research analysts clearly believe TAKE-TWO INTERACTIVE SOFTWARE is more favorable than Adobe.

Summary

Adobe beats TAKE-TWO INTERACTIVE SOFTWARE on 9 of the 14 factors compared between the two stocks.

TAKE-TWO INTERACTIVE SOFTWARE Company Profile

Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment solutions for consumers worldwide. The company offers its products under the Rockstar Games and 2K labels, as well as under Private Division and Social Point labels. It develops and publishes action/adventure products under the Grand Theft Auto, Max Payne, Midnight Club, and Red Dead names through developing sequels; and offers downloadable episodes, content and virtual currency, and releasing titles for smartphones and tablets. The company also develops brands in other genres, including the L.A. Noire, Bully, and Manhunt franchises. In addition, the company publishes various entertainment properties across platforms and a range of genres, including shooter, action, role-playing, strategy, sports, and family/casual entertainment under the BioShock, Mafia, Sid Meier's Civilization, XCOM series, Borderlands, and Evolve. Further, it publishes sports simulation titles, including NBA 2K series, a basketball video game; and the WWE 2K professional wrestling series. Additionally, the company offers free-to-play mobile games, such as Dragon City and Monster Legends. Its products are designed for console gaming systems, such as Sony's PlayStation 3 and PlayStation 4, and Microsoft's Xbox 360 and Xbox One; and personal computers 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 founded in 1993 and is headquartered in New York, New York.

Adobe Company Profile

Adobe Inc. operates as a diversified software company worldwide. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote, and monetize their digital content. Its flagship product is Creative Cloud, a subscription service that allows customer to download and access the latest versions of its creative products. This segment serves traditional content creators, Web application developers, and digital media professionals, as well as their management in marketing departments and agencies, companies, and publishers. The company's Digital Experience segment offers solutions for how digital advertising and marketing are created, managed, executed, measured, and optimized. This segment provides analytics, social marketing, targeting, media optimization, digital experience management, cross-channel campaign management, marketing automation, audience management, and video delivery and monetization solutions to digital marketers, advertisers, publishers, merchandisers, Web analysts, chief marketing officers, chief information officers, and chief revenue officers. Its Publishing segment offers products and services, such as e-learning solutions, technical document publishing, Web application development, and high-end printing, as well as publishing needs of technical and business, and original equipment manufacturers (OEMs) printing businesses. The company offers its products and services directly to enterprise customers through its sales force, as well as to end-users through app stores and through its Website at adobe.com. It also distributes products and services through a network of distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and OEMs. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. The company was founded in 1982 and is headquartered in San Jose, California.

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