NetEase (NASDAQ:NTES – Get Free Report) and Take-Two Interactive Software (NASDAQ:TTWO – Get Free Report) are both large-cap communication services companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.
Analyst Ratings
This is a breakdown of current recommendations and price targets for NetEase and Take-Two Interactive Software, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NetEase | 0 | 3 | 6 | 0 | 2.67 |
| Take-Two Interactive Software | 1 | 1 | 19 | 1 | 2.91 |
NetEase currently has a consensus price target of $160.57, suggesting a potential upside of 38.20%. Take-Two Interactive Software has a consensus price target of $296.95, suggesting a potential upside of 44.54%. Given Take-Two Interactive Software’s stronger consensus rating and higher probable upside, analysts clearly believe Take-Two Interactive Software is more favorable than NetEase.
Risk & Volatility
Insider and Institutional Ownership
11.1% of NetEase shares are owned by institutional investors. Comparatively, 95.5% of Take-Two Interactive Software shares are owned by institutional investors. 54.7% of NetEase shares are owned by insiders. Comparatively, 1.1% of Take-Two Interactive Software shares are owned 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.
Valuation & Earnings
This table compares NetEase and Take-Two Interactive Software”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NetEase | $16.11 billion | 4.62 | $4.83 billion | $7.26 | 16.00 |
| Take-Two Interactive Software | $6.66 billion | 5.77 | -$298.20 million | ($1.73) | -118.76 |
NetEase has higher revenue and earnings than Take-Two Interactive Software. Take-Two Interactive Software is trading at a lower price-to-earnings ratio than NetEase, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares NetEase and Take-Two Interactive Software’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NetEase | 27.86% | 19.50% | 14.45% |
| Take-Two Interactive Software | -4.79% | 12.25% | 4.46% |
Summary
NetEase beats Take-Two Interactive Software on 8 of the 15 factors compared between the two stocks.
About NetEase
NetEase, Inc. engages in online games, music streaming, online intelligent learning services, and internet content services businesses in China and internationally . The company operates through Games and Related Value-Added Services, Youdao, Cloud Music, and Innovative Businesses and Others segments. It develops and operates PC and mobile games, as well as offers games licensed from other game developers. The company's products and services include Youdao Dictionary, an online knowledge tool; Youdao Translation, a tool specifically designed to support translation needs of business and leisure travelers; U-Dictionary, an online dictionary and translation app; Youdao Kids' Dictionary, a smart and fun tool; smart devices, such as Youdao Dictionary Pen, Youdao Smart Learning Pad, Youdao Listening Pod, Youdao Smart Light, Youdao Pocket Translator, and Youdao Super Dictionary; online courses; interactive learning apps; and education digitalization solutions, such as Youdao Smart Learning Terminal, a device that automates paper-based homework processing; Youdao Smart Cloud, a cloud-based platform that allows third-party app developers, smart device brands, and manufacturers to the company's OCR capabilities; and Youdao Sports, a sports-centric educational system. Its products and services also include NetEase Cloud Music, a music streaming platform; Yanxuan, an e-commerce platform, which sells private label products; www.163.com portal and related mobile app, Wangyi Xinwen, which deliver information such as news, sports events, technology, fashion trends, and online entertainment; NetEase Mail, an email service; NetEase CC Live streaming, a live streaming platform with a focus on game broadcasting; and NetEase Pay, a payment platform. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Hangzhou, the People's Republic of China.
About Take-Two Interactive Software
Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment solutions for consumers worldwide. It develops and publishes action/adventure products under the Grand Theft Auto, LA Noire, Max Payne, Midnight Club, and Red Dead Redemption names, as well as other franchises. The company also publishes various entertainment properties across various platforms and a range of genres, such as shooter, action, role-playing, strategy, sports, and family/casual entertainment under the BioShock, Mafia, Sid Meier’s Civilization, XCOM series, Borderlands, and Tiny Tina’s Wonderland names. In addition, it publishes sports simulation titles comprising NBA 2K series, a basketball video game; the WWE 2K professional wrestling series; mobile titles, including WWE SuperCard; and PGA TOUR 2K. Further, the company offers Kerbal Space Program and OlliOlli World; free-to-play mobile games, such as CSR Racing, Dragon City, Empires & Puzzles, FarmVille, Golf Rival, Harry Potter: Puzzles & Spells, Match Factory!, Merge Dragons!, Merge Magic!, Monster Legends, Toon Blast, Top Eleven, Top Troops, Toy Blast, Two Dots, Words With Friends, and Zynga Poker; and hyper-casual mobile titles, including Fill the Fridge!, Parking Jam 3D, Power Slap, Pull the Pin, Twisted Tangle, and Tangled Snakes. Its products are designed for console gaming systems; personal computers; and mobiles comprising smartphones and tablets. The company provides its products through physical retail, digital download, online platforms, and cloud streaming services. Take-Two Interactive Software, Inc. was incorporated in 1993 and is based in New York, New York.
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