Gravity (NASDAQ: GRVY) and Take-Two Interactive Software (NASDAQ:TTWO) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Gravity and Take-Two Interactive Software, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gravity 0 0 0 0 N/A
Take-Two Interactive Software 0 4 18 0 2.82

Take-Two Interactive Software has a consensus price target of $123.48, suggesting a potential upside of 13.86%. Given Take-Two Interactive Software’s higher possible upside, analysts plainly believe Take-Two Interactive Software is more favorable than Gravity.

Volatility & Risk

Gravity has a beta of 0.1, meaning that its share price is 90% less volatile than the S&P 500. Comparatively, Take-Two Interactive Software has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Insider and Institutional Ownership

7.0% of Gravity shares are owned by institutional investors. Comparatively, 91.0% of Take-Two Interactive Software shares are owned by institutional investors. 1.6% of Take-Two Interactive Software shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Gravity and Take-Two Interactive Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gravity 9.78% 26.08% 13.50%
Take-Two Interactive Software 9.43% 27.78% 10.06%

Earnings and Valuation

This table compares Gravity and Take-Two Interactive Software’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gravity $42.70 million 6.30 $200,000.00 $2.26 34.31
Take-Two Interactive Software $1.78 billion 6.97 $67.30 million $1.61 67.36

Take-Two Interactive Software has higher revenue and earnings than Gravity. Gravity is trading at a lower price-to-earnings ratio than Take-Two Interactive Software, indicating that it is currently the more affordable of the two stocks.

Summary

Take-Two Interactive Software beats Gravity on 10 of the 13 factors compared between the two stocks.

About Gravity

Gravity Co., Ltd. is a developer, distributor and publisher of online games in Japan and Taiwan. The Company’s segments include online games, mobile games and other. Its principal product includes Ragnarok Online, which is a multiplayer online role playing game. It categorizes products into over three categories, such as online games; mobile games and applications, and other games and game-related products and services, including character-based merchandise and animation. It offers over five online games, such as Ragnarok Online, Ragnarok Online II, Requiem, Dragonica (Dragon Saga) and R.O.S.E. Online, which are action adventure massively multiplayer online role-playing games (MMORPG). It develops mobile games, including Ragnarok Online-Uprising: Valkyrie, Ragnarok Online Mobile Story and Ragnarok Violet, and also publishes mobile games licensed from third parties. It provides games for game consoles and handheld game consoles, such as Nintendo DS, Xbox 360 and the PlayStation series.

About Take-Two Interactive Software

Take-Two Interactive Software, Inc. is a developer, publisher and marketer of entertainment for consumers around the world. The Company develops and publishes products through its labels, Rockstar Games and 2K. It operates through publishing segment. It has a portfolio of software content for the hardware platforms in a range of genres, including action, adventure, family/casual, racing, role-playing, shooter, sports and strategy, which it distributes across the world. The Company’s products are designed for console gaming systems, such as PlayStation 3 and PlayStation 4; Xbox 360 and Xbox One, and personal computers, including smartphones and tablets. Rockstar Games is the developer and publisher of Grand Theft Auto, as well as other franchises, including L.A. Noire, Max Payne, Midnight Club and Red Dead. 2K publishes owned and licensed titles across a range of genres. It has internal development studios in Canada, China, Czech Republic, the United Kingdom and the United States.

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