Eros International (NYSE: EROS) and Function(x) (OTCMKTS:FNCX) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.

Analyst Ratings

This is a summary of current ratings and recommmendations for Eros International and Function(x), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eros International 0 0 2 0 3.00
Function(x) 0 0 0 0 N/A

Eros International currently has a consensus price target of $17.00, indicating a potential upside of 58.14%. Given Eros International’s higher possible upside, equities analysts clearly believe Eros International is more favorable than Function(x).

Profitability

This table compares Eros International and Function(x)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eros International 0.96% 0.22% 0.15%
Function(x) N/A N/A N/A

Risk & Volatility

Eros International has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Function(x) has a beta of -0.65, meaning that its share price is 165% less volatile than the S&P 500.

Institutional and Insider Ownership

64.6% of Eros International shares are held by institutional investors. Comparatively, 0.0% of Function(x) shares are held by institutional investors. 60.5% of Function(x) shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Eros International and Function(x)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eros International $252.99 million 2.19 $3.80 million $0.04 268.82
Function(x) $4.51 million 0.40 -$61.86 million N/A N/A

Eros International has higher revenue and earnings than Function(x).

Summary

Eros International beats Function(x) on 10 of the 11 factors compared between the two stocks.

Eros International Company Profile

Eros International Plc (Eros) is a holding company, which serves the Indian film entertainment industry. The Company’s principal activities include the acquisition, co-production and distribution of Indian films and related content. It distributes its film content through the distribution channels, such as theatrical, including multiplex chains and standalone theaters; television syndication, including satellite television broadcasting, cable television and terrestrial television; digital and ancillary, including music, inflight entertainment, home video, Internet protocol television (IPTV), video on demand (VOD), and Internet channels and Eros Now. As of March 31, 2016, its distribution network extends to over 50 countries, such as the United States, the United Kingdom, the Middle East, Germany, Poland, Russia, Romania, Indonesia and Arabic speaking countries. It conducts global operations through its Indian and international subsidiaries, including Eros International Media Limited.

Function(x) Company Profile

Function(x) Inc., formerly DraftDay Fantasy Sports, Inc., is a diversified media and entertainment company. The Company conducts three lines of businesses, which are digital publishing through Wetpaint.com, Inc. (Wetpaint) and Rant, Inc. (Rant); fantasy sports gaming through DraftDay Gaming Group, Inc. (DDGG), and digital content distribution through Choose Digital, Inc. (Choose Digital). The Company’s segments include Wetpaint, which is a media channel reporting original news stories and publishing information content covering television shows, music, celebrities, entertainment news and fashion; Choose Digital, which is a business-to-business platform for delivering digital content; DDGG, which is a business-to-business operator of daily fantasy sports, and Other. The Company’s digital publishing business also includes Rant, which is a digital publisher that publishes original content in over 13 verticals, such as in sports, entertainment, pets, cars and food.

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