GameSquare (NASDAQ:GAME) versus GameStop (NYSE:GME) Critical Contrast

GameStop (NYSE:GME) and GameSquare (NASDAQ:GAME) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Volatility and Risk

GameStop has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500. Comparatively, GameSquare has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500.

Insider & Institutional Ownership

29.2% of GameStop shares are held by institutional investors. Comparatively, 64.3% of GameSquare shares are held by institutional investors. 8.6% of GameStop shares are held by insiders. Comparatively, 5.1% of GameSquare shares are held by 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.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GameStop	1	1	0	0	1.50
GameSquare	2	0	0	0	1.00

GameStop presently has a consensus price target of $13.50, indicating a potential downside of 37.64%. Given GameStop’s stronger consensus rating and higher possible upside, equities research analysts clearly believe GameStop is more favorable than GameSquare.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GameStop	$3.63 billion	2.68	$418.40 million	$0.75	28.87
GameSquare	$45.00 million	1.00	-$40.10 million	($0.55)	-0.85

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GameStop	11.53%	12.47%	6.73%
GameSquare	-60.09%	-54.32%	-19.19%

Summary

GameStop beats GameSquare on 12 of the 13 factors compared between the two stocks.

About GameStop

GameStop Corp., a specialty retailer, provides games and entertainment products through its stores and ecommerce platforms in the United States, Canada, Australia, and Europe. The company sells new and pre-owned gaming platforms; accessories, such as controllers, gaming headsets, and virtual reality products; new and pre-owned gaming software; and in-game digital currency, digital downloadable content, and full-game downloads. It sells collectibles comprising apparel, toys, trading cards, gadgets, and other retail products for pop culture and technology enthusiasts, as well as engages in the digital asset wallet and NFT marketplace activities. The company operates stores and ecommerce sites under the GameStop, EB Games, and Micromania brands; and pop culture themed stores that sell collectibles, apparel, gadgets, electronics, toys, and other retail products under the Zing Pop Culture brand, as well as offers Game Informer magazine, a print and digital gaming publication. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1996 and is headquartered in Grapevine, Texas.

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.