Electronic Arts (NASDAQ: EA) and Mulesoft (NASDAQ:MULE) are both mid-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Electronic Arts and Mulesoft, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Electronic Arts 0 3 21 0 2.88
Mulesoft 0 7 3 0 2.30

Electronic Arts currently has a consensus target price of $120.66, indicating a potential upside of 0.48%. Mulesoft has a consensus target price of $25.43, indicating a potential upside of 24.89%. Given Mulesoft’s higher probable upside, analysts clearly believe Mulesoft is more favorable than Electronic Arts.

Profitability

This table compares Electronic Arts and Mulesoft’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%
Mulesoft -28.36% -30.07% -18.42%

Insider and Institutional Ownership

93.8% 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 hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Electronic Arts $5.02 billion 7.39 $1.58 billion $3.74 32.11
Mulesoft $234.86 million 11.18 -$53.90 million N/A N/A

Electronic Arts has higher revenue and earnings than Mulesoft.

Summary

Electronic Arts beats Mulesoft on 9 of the 11 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.

Mulesoft Company Profile

MuleSoft, Inc. is engaged in providing a software platform that connects a range of technologies. The Company enables organizations to manage and secure the flow of data between all systems in the enterprise. The Company offers organizations to create agile infrastructures. The Company has developed Anypoint Platform. The Company’s customers use its Anypoint Platform to connect their applications, data, and devices into an application network where systems are pluggable instead of glued together with custom integration code. The application network enables a self-serve infrastructure through discoverable building blocks, or nodes, that can be used and reused to rapidly compose applications. With an application network built with Anypoint Platform, organizations can transform into composable enterprises.

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