GRAVITY (NASDAQ:GRVY) vs. Starz Entertainment (NASDAQ:STRZ) Critical Review

Starz Entertainment (NASDAQ:STRZ) and GRAVITY (NASDAQ:GRVY) are both small-cap communication services companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for Starz Entertainment and GRAVITY, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starz Entertainment	1	3	4	1	2.56
GRAVITY	0	1	0	0	2.00

Starz Entertainment currently has a consensus target price of $32.71, suggesting a potential upside of 37.51%. Given Starz Entertainment’s stronger consensus rating and higher possible upside, analysts plainly believe Starz Entertainment is more favorable than GRAVITY.

Institutional and Insider Ownership

9.9% of GRAVITY shares are owned by institutional investors. 22.6% of Starz Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Starz Entertainment and GRAVITY”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starz Entertainment	$963.40 million	0.42	-$115.80 million	($25.49)	-0.93
GRAVITY	$388.04 million	1.20	$47.22 million	$8.15	8.20

GRAVITY has lower revenue, but higher earnings than Starz Entertainment. Starz Entertainment is trading at a lower price-to-earnings ratio than GRAVITY, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Starz Entertainment and GRAVITY’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starz Entertainment	-33.98%	-25.64%	-6.79%
GRAVITY	14.92%	12.70%	10.85%

Risk & Volatility

Starz Entertainment has a beta of 2.55, suggesting that its stock price is 155% more volatile than the S&P 500. Comparatively, GRAVITY has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Summary

GRAVITY beats Starz Entertainment on 8 of the 15 factors compared between the two stocks.

About Starz Entertainment

Starz is a premium cable and streaming network owned by Starz Entertainment, which was formerly a part of Lionsgate. Starz had about 20 million subscribers in the U.S. and Canada as of Dec. 31, 2024. The company’s franchises include “Outlander” and “Power.”

About GRAVITY

Gravity Co., Ltd. develops and publishes online and mobile games worldwide. It offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Landverse. Its mobile games portfolio includes Ragnarok M; Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; Ragnarok Arena; WITH ISLAND; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; Generation Zombie; Ragnarok Idle Adventure; Ragnarok 20 Heroes; White Chord; WITH: Whale In The High; Ragnarok Lost Memories; and Paladog Tactics. It also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; Pigromance for Steam, Stove, Nintendo Switch, Xbox One, Xbox Series X|S; ALTF4 11 for Steam and Stove; Wetory for Steam, Stove, Nintedo Switch; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin, and Kongsuni; and markets dolls, stationery, food, and other character based merchandises, as well as game manuals, monthly magazines, and other publications; PC games, including Puzzle Platformer, ALTF42, Ragnarok ZERO, KAMiBAKO-Mythology of Cube, Psychodemic, and FINAL KNIGHT; social network games and mobile games, such as Ragnarok V: Returns, Ragnarok: The Lost Memories and Ragnrok Begins in-house; and web-browser-based games, such as Ragnarok Prequel and Ragnarok Prequel II. Further, the company provides system development and maintenance services, as well as system integration services to third parties. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.