Analyzing NeoGames (NASDAQ:NGMS) and TKO Group (NYSE:TKO)

NeoGames (NASDAQ:NGMS) and TKO Group (NYSE:TKO) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Insider & Institutional Ownership

29.7% of NeoGames shares are held by institutional investors. Comparatively, 89.8% of TKO Group shares are held by institutional investors. 38.9% of TKO Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares NeoGames and TKO Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NeoGames	-9.54%	9.15%	2.80%
TKO Group	3.02%	3.11%	2.12%

Valuation and Earnings

This table compares NeoGames and TKO Group’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NeoGames	$191.54 million	5.14	-$18.28 million	($0.54)	-54.43
TKO Group	$1.68 billion	10.00	$208.18 million	$0.68	143.23

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

Volatility and Risk

NeoGames has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, TKO Group has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for NeoGames and TKO Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NeoGames	0	5	0	0	2.00
TKO Group	0	3	11	0	2.79

NeoGames currently has a consensus price target of $29.50, suggesting a potential upside of 0.37%. TKO Group has a consensus price target of $108.31, suggesting a potential upside of 11.20%. Given TKO Group’s stronger consensus rating and higher possible upside, analysts plainly believe TKO Group is more favorable than NeoGames.

Summary

TKO Group beats NeoGames on 11 of the 14 factors compared between the two stocks.

About NeoGames

NeoGames S.A. provides iLottery solutions worldwide. The company offers various technology platforms, a range of value-added services, and a game studio that provides a portfolio of games through personal computers, smartphones, and handheld devices. It also develops and operates online lotteries and games that allows lottery operators to distribute lottery products through online sales channels using the company's technology. In addition, the company offers software development and platform services; and regulation and compliance, payment processing, risk management, player relationship management, and player value optimization services. The company was incorporated in 2014 and is headquartered in Tel Aviv, Israel.

About TKO Group

TKO Group Holdings, Inc. operates as a sports and entertainment company. The company produces and licenses live events, television programs, and long-form and short-form content, reality series, and other filmed entertainment on digital and linear channels and via pay-per-view. It is involved in the merchandising of video games, apparel, equipment, trading cards, memorabilia, digital goods, and toys, as well as sale of travel packages and tickets. In addition, the company engages in the corporate sponsorships and advertising business, which offers sale of in-venue and in-broadcast advertising assets, content product integration, and digital impressions. The company was incorporated in 2023 and is based in New York, New York. TKO Group Holdings, Inc. is a subsidiary of Endeavor Group Holdings, Inc.