Contrasting Melco Resorts & Entertainment (NASDAQ:MLCO) and Skillz (NYSE:SKLZ)

Skillz (NYSE:SKLZ) and Melco Resorts & Entertainment (NASDAQ:MLCO) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, earnings, risk, profitability, analyst recommendations and dividends.

Volatility and Risk

Skillz has a beta of 3, indicating that its share price is 200% more volatile than the S&P 500. Comparatively, Melco Resorts & Entertainment has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Earnings & Valuation

This table compares Skillz and Melco Resorts & Entertainment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Skillz	$92.26 million	0.94	-$48.23 million	($4.14)	-1.37
Melco Resorts & Entertainment	$5.06 billion	0.75	$43.54 million	$0.26	34.85

Melco Resorts & Entertainment has higher revenue and earnings than Skillz. Skillz is trading at a lower price-to-earnings ratio than Melco Resorts & Entertainment, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

19.4% of Skillz shares are held by institutional investors. Comparatively, 39.6% of Melco Resorts & Entertainment shares are held by institutional investors. 30.4% of Skillz shares are held by insiders. Comparatively, 57.1% of Melco Resorts & Entertainment shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Skillz and Melco Resorts & Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Skillz	-69.44%	-43.98%	-20.33%
Melco Resorts & Entertainment	1.15%	-18.47%	2.24%

Analyst Recommendations

This is a summary of recent ratings and price targets for Skillz and Melco Resorts & Entertainment, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Skillz	1	0	1	0	2.00
Melco Resorts & Entertainment	2	2	5	0	2.33

Skillz currently has a consensus price target of $15.00, indicating a potential upside of 164.08%. Melco Resorts & Entertainment has a consensus price target of $8.40, indicating a potential downside of 7.28%. Given Skillz’s higher possible upside, equities research analysts plainly believe Skillz is more favorable than Melco Resorts & Entertainment.

Summary

Melco Resorts & Entertainment beats Skillz on 11 of the 14 factors compared between the two stocks.

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.

About Melco Resorts & Entertainment

Melco Resorts & Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia. It owns and operates City of Dreams, an integrated casino resort that has 500 gaming tables and 800 gaming machines; approximately 1,400 hotel rooms and suites; a wet stage performance theater with approximately 2,000 seats; approximately 30 restaurants and bars, and 150 retail outlets; and recreation and leisure facilities, including health and fitness clubs, swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau, a casino hotel, which has approximately 112 gaming tables and 56 gaming machines; 230 hotel rooms; various fine dining and casual restaurants, and recreation and leisure facilities; and various non-gaming amenities comprising spa, gymnasium, outdoor garden podium, and sky terrace lounge. In addition, it operates Studio City, a cinematically-themed integrated entertainment, retail, and gaming resort that comprises 280 gaming tables and 980 gaming machines in Cotai, Macau. Further, the company owns and operates 7 Mocha Clubs with 1,034 gaming machines, as well as Taipa Square casino in Taipa Island, Macau. Additionally, it operates and manages City of Dreams Manila, a casino, hotel, retail, and entertainment integrated resort in the Entertainment City complex in Manila. The company was formerly known as Melco Crown Entertainment Limited and changed its name to Melco Resorts & Entertainment Limited in April 2017. Melco Resorts & Entertainment Limited was incorporated in 2004 and is based in Central, Hong Kong. As of February 16, 2017, Melco Resorts & Entertainment Limited operates as a subsidiary of Melco Leisure and Entertainment Group Limited.