PENN Entertainment (NASDAQ:PENN – Get Free Report) and Motorsport Games (NASDAQ:MSGM – Get Free Report) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.
Insider and Institutional Ownership
91.7% of PENN Entertainment shares are held by institutional investors. Comparatively, 1.7% of Motorsport Games shares are held by institutional investors. 2.7% of PENN Entertainment shares are held by company insiders. Comparatively, 17.3% of Motorsport Games shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Volatility and Risk
PENN Entertainment has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Motorsport Games has a beta of 1.79, meaning that its share price is 79% more volatile than the S&P 500.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PENN Entertainment | $6.82 billion | 0.31 | -$311.50 million | ($6.35) | -2.29 |
| Motorsport Games | $8.13 million | 2.66 | -$2.75 million | $0.40 | 9.35 |
Motorsport Games has lower revenue, but higher earnings than PENN Entertainment. PENN Entertainment is trading at a lower price-to-earnings ratio than Motorsport Games, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings for PENN Entertainment and Motorsport Games, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PENN Entertainment | 2 | 7 | 10 | 0 | 2.42 |
| Motorsport Games | 1 | 0 | 0 | 0 | 1.00 |
PENN Entertainment currently has a consensus price target of $22.56, indicating a potential upside of 55.18%. Given PENN Entertainment’s stronger consensus rating and higher probable upside, research analysts plainly believe PENN Entertainment is more favorable than Motorsport Games.
Profitability
This table compares PENN Entertainment and Motorsport Games’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PENN Entertainment | -1.12% | -4.36% | -0.85% |
| Motorsport Games | 34.24% | 117.87% | 47.26% |
Summary
Motorsport Games beats PENN Entertainment on 9 of the 14 factors compared between the two stocks.
About PENN Entertainment
PENN Entertainment, Inc., together with its subsidiaries, provides integrated entertainment, sports content, and casino gaming experiences. The company operates through five segments: Northeast, South, West, Midwest, and Interactive. It operates online sports betting in various jurisdictions; and iCasino under Hollywood Casino, L'Auberge, ESPN BET, and theScore Bet Sportsbook and Casino brands. The company's portfolio also includes PENN Play, customer loyalty program, which offers a set of rewards and experiences for business channels. In addition, it owns various trademarks and service marks, including Ameristar, Argosy, Boomtown, Hollywood Casino, Hollywood Gaming, L'Auberge, PENN Play, theScore, theScore Bet, theScore esports, and M Resort. The company was formerly known as Penn National Gaming, Inc. and changed its name to PENN Entertainment, Inc. in August 2022. PENN Entertainment, Inc. was founded in 1972 and is based in Wyomissing, Pennsylvania.
About Motorsport Games
Motorsport Games Inc. develops and publishes multi-platform racing video games in the United States. It operates through Gaming and Esports segments. The company offers rFactor 2, a realistic racing simulation game; NASCAR Heat Mobile, a racing experience for mobile devices; NASCAR Heat 3, NASCAR Heat 4, NASCAR Heat 5, NASCAR Heat Ultimate Edition, and NASCAR 21: Ignition, which are racing video games; KartKraft, a kart racing simulator; NASCAR Rivals, a racing video game; and Le Mans Ultimate, a official game of the FIA World Endurance Championship and 24 Hours of Le Mans. It also organizes and facilitates esports tournaments, competitions, and events for its licensed racing games, as well as on behalf of third-party racing game developers and publishers. The company offers its products for game consoles, personal computer, and mobile platforms through various retail and digital channels, including full-game and downloadable content. The company was founded in 2018 and is headquartered in Miami, Florida. Motorsport Games Inc. operates as a subsidiary of Motorsport Network LLC.
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