Financial Analysis: Square Enix (OTCMKTS:SQNXF) versus Rumble (NASDAQ:RUM)

Rumble (NASDAQ:RUM) and Square Enix (OTCMKTS:SQNXF) are both mid-cap communication services companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.

Profitability

This table compares Rumble and Square Enix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rumble	-134.60%	-22.77%	-16.34%
Square Enix	N/A	N/A	N/A

Risk and Volatility

Rumble has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Square Enix has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.

Insider and Institutional Ownership

26.2% of Rumble shares are owned by institutional investors. 45.1% of Rumble shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Rumble and Square Enix”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rumble	$100.62 million	27.68	-$81.83 million	($0.59)	-9.52
Square Enix	$1.98 billion	3.79	$195.47 million	$0.75	27.68

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

Analyst Ratings

This is a summary of current ratings for Rumble and Square Enix, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rumble	2	1	0	0	1.33
Square Enix	0	0	0	1	4.00

Rumble presently has a consensus price target of $25.00, indicating a potential upside of 345.00%. Given Rumble’s higher probable upside, equities research analysts plainly believe Rumble is more favorable than Square Enix.

Summary

Square Enix beats Rumble on 9 of the 14 factors compared between the two stocks.

About Rumble

Rumble Inc. operates a video-sharing platform where users can upload, watch and share videos. The company also offers live-streaming tools and services that help creators publish and monetize content, including through advertising and subscriptions. Founded in 2013 by Chris Pavlovski, Rumble has expanded beyond video distribution into cloud computing. Its Rumble Cloud business provides infrastructure services to organizations seeking alternatives to larger cloud providers. The company serves creators, viewers and business customers in multiple countries, with a substantial presence in North America.

About Square Enix

Square Enix Holdings Co., Ltd. is a Japanese entertainment company best known for developing and publishing video games. Its titles include the Final Fantasy, Dragon Quest and Kingdom Hearts franchises, released across console, PC and mobile platforms. The company also operates amusement facilities and develops arcade games, publishes manga and other books, and sells character-related merchandise. Its publishing business includes English-language manga releases through Square Enix Manga & Books.