Comparing GameSquare (NASDAQ:GAME) & PENN Entertainment (NASDAQ:PENN)

GameSquare (NASDAQ:GAME) and PENN Entertainment (NASDAQ:PENN) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Profitability

This table compares GameSquare and PENN Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GameSquare	-46.12%	-275.13%	-54.19%
PENN Entertainment	-1.12%	-4.36%	-0.85%

Volatility and Risk

GameSquare has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, PENN Entertainment has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500.

Institutional and Insider Ownership

64.3% of GameSquare shares are held by institutional investors. Comparatively, 91.7% of PENN Entertainment shares are held by institutional investors. 5.1% of GameSquare shares are held by company insiders. Comparatively, 2.7% of PENN Entertainment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares GameSquare and PENN Entertainment”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GameSquare	$93.38 million	0.54	-$48.75 million	($1.04)	-0.49
PENN Entertainment	$6.82 billion	0.27	-$311.50 million	($6.35)	-2.17

GameSquare has higher earnings, but lower revenue than PENN Entertainment. PENN Entertainment is trading at a lower price-to-earnings ratio than GameSquare, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for GameSquare and PENN Entertainment, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GameSquare	1	0	0	0	1.00
PENN Entertainment	3	5	10	0	2.39

PENN Entertainment has a consensus target price of $22.00, suggesting a potential upside of 59.88%. Given PENN Entertainment’s stronger consensus rating and higher probable upside, analysts clearly believe PENN Entertainment is more favorable than GameSquare.

Summary

PENN Entertainment beats GameSquare on 9 of the 14 factors compared between the two stocks.

About GameSquare

GameSquare Holdings, Inc. operates as a vertically integrated digital media, entertainment, and technology company. Its platform to connect with gaming and youth culture audiences. The company’s end-to-end platform includes Code Red Esports Ltd., an esports talent agency; GCN, a digital media company focusing on the gaming and esports audience; Zoned, a gaming and lifestyle marketing agency; Complexity Gaming, a esports organization operating; Fourth Frame Studios, a creative production studio; and Mission Supply, a merchandise and consumer products business; Frankly Media, programmatic advertising, Stream Hatchet, live streaming analytics, and Sideqik a social influencer marketing platform. The company also engages in providing marketing and creative services, offering leading data and analytics solutions. The company was formerly known as Engine Gaming & Media, Inc. GameSquare Holdings, Inc. is headquartered in Frisco, Texas.

About PENN Entertainment

PENN Entertainment, Inc., together with its subsidiaries, provides integrated entertainment, sports content, and casino gaming experiences. The company operates through five segments: Northeast, South, West, Midwest, and Interactive. It operates online sports betting in various jurisdictions; and iCasino under Hollywood Casino, L'Auberge, ESPN BET, and theScore Bet Sportsbook and Casino brands. The company's portfolio also includes PENN Play, customer loyalty program, which offers a set of rewards and experiences for business channels. In addition, it owns various trademarks and service marks, including Ameristar, Argosy, Boomtown, Hollywood Casino, Hollywood Gaming, L'Auberge, PENN Play, theScore, theScore Bet, theScore esports, and M Resort. The company was formerly known as Penn National Gaming, Inc. and changed its name to PENN Entertainment, Inc. in August 2022. PENN Entertainment, Inc. was founded in 1972 and is based in Wyomissing, Pennsylvania.