Electronic Arts (NASDAQ: EA) and Marketo (NASDAQ:MKTO) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their profitabiliy, earnings, dividends, risk, valuation, institutional ownership and analyst recommendations.

Valuation & Earnings

This table compares Electronic Arts and Marketo’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Electronic Arts $5.02 billion 7.02 $1.56 billion $3.74 30.48
Marketo N/A N/A N/A ($1.71) -20.34

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

Profitability

This table compares Electronic Arts and Marketo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Electronic Arts 23.31% 29.77% 15.74%
Marketo -23.20% -98.33% -27.18%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Electronic Arts and Marketo, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Electronic Arts 0 4 19 0 2.83
Marketo 0 0 0 0 N/A

Electronic Arts presently has a consensus price target of $114.01, indicating a potential upside of 0.02%. Given Electronic Arts’ higher probable upside, analysts clearly believe Electronic Arts is more favorable than Marketo.

Institutional and Insider Ownership

98.0% of Electronic Arts shares are owned by institutional investors. 2.6% of Electronic Arts shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Electronic Arts has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Marketo has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Summary

Electronic Arts beats Marketo on 9 of the 10 factors compared between the two stocks.

Electronic Arts Company Profile

Electronic Arts Inc. develops, markets, publishes and distributes games, content and services that can be played by consumers on a range of platforms, which include consoles, personal computers (PCs), mobile phones and tablets. The Company’s games and services are based on a portfolio of intellectual property that includes established brands, such as FIFA, Madden NFL, Star Wars, Battlefield, the Sims and Need for Speed. The Company markets and sells its games and services through retail channels and through digital distribution channels. The Company’s PC games and additional content can be downloaded directly through its Origin online platform, as well as through third-party online download stores. Its mobile, tablet and PC free-to-download games and additional content are available through third-party application storefronts, such as the Apple Application Store and Google Play.

Marketo Company Profile

Marketo, Inc. is a United States-based provider of a cloud-based Engagement Marketing software platform, which enables organizations to involve in engagement marketing. The Company’s platform offers a range applications across various categories, including Marketing Automation, which helps to organize personalized multi-channel marketing campaigns and workflows; Email Marketing, which provides the ability to tap the insights captured in the Audience Hub to send e-mail messages; Mobile Engagement, which engages customers on their mobile devices; Digital Ads, which allows marketers to focus on behavioral data captured in the Audience Hub for personalized digital advertisements; Web Personalization, which helps in personalizing experiences to engage people; Marketing Analytics; Predictive Content, which discovers Website assets, such as e-books and case studies; Marketing Calendar, and Sales Insight. It offers solutions, such as Lead Management solution and Consumer Marketing solution.

Receive News & Ratings for Electronic Arts Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Electronic Arts Inc. and related companies with Analyst Ratings Network's FREE daily email newsletter.