GameSquare (NASDAQ:GAME – Get Free Report) and PENN Entertainment (NASDAQ:PENN – Get Free Report) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.
Volatility & Risk
GameSquare has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, PENN Entertainment has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500.
Profitability
This table compares GameSquare and PENN Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| GameSquare | -46.12% | -275.13% | -54.19% |
| PENN Entertainment | -1.12% | -4.36% | -0.85% |
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| GameSquare | $102.81 million | 0.45 | -$48.75 million | ($1.04) | -0.45 |
| PENN Entertainment | $6.82 billion | 0.27 | -$311.50 million | ($6.35) | -2.17 |
GameSquare has higher earnings, but lower revenue than PENN Entertainment. PENN Entertainment is trading at a lower price-to-earnings ratio than GameSquare, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
64.3% of GameSquare shares are held by institutional investors. Comparatively, 91.7% of PENN Entertainment shares are held by institutional investors. 5.1% of GameSquare shares are held by company insiders. Comparatively, 2.7% of PENN Entertainment shares are held by company 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.
Analyst Ratings
This is a breakdown of current ratings for GameSquare and PENN Entertainment, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| GameSquare | 1 | 0 | 0 | 0 | 1.00 |
| PENN Entertainment | 3 | 6 | 9 | 0 | 2.33 |
PENN Entertainment has a consensus price target of $21.56, suggesting a potential upside of 56.25%. Given PENN Entertainment’s stronger consensus rating and higher possible upside, analysts clearly believe PENN Entertainment is more favorable than GameSquare.
Summary
PENN Entertainment beats GameSquare on 9 of the 14 factors compared between the two stocks.
About GameSquare
GameSquare Holdings, Inc. operates as a vertically integrated digital media, entertainment, and technology company. Its platform to connect with gaming and youth culture audiences. The company’s end-to-end platform includes Code Red Esports Ltd., an esports talent agency; GCN, a digital media company focusing on the gaming and esports audience; Zoned, a gaming and lifestyle marketing agency; Complexity Gaming, a esports organization operating; Fourth Frame Studios, a creative production studio; and Mission Supply, a merchandise and consumer products business; Frankly Media, programmatic advertising, Stream Hatchet, live streaming analytics, and Sideqik a social influencer marketing platform. The company also engages in providing marketing and creative services, offering leading data and analytics solutions. The company was formerly known as Engine Gaming & Media, Inc. GameSquare Holdings, Inc. is headquartered in Frisco, Texas.
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.
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