Analyzing PENN Entertainment (NASDAQ:PENN) and PLAYSTUDIOS (NASDAQ:MYPS)

PLAYSTUDIOS (NASDAQ:MYPS) and PENN Entertainment (NASDAQ:PENN) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Valuation and Earnings

This table compares PLAYSTUDIOS and PENN Entertainment”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PLAYSTUDIOS	$289.43 million	0.28	-$28.69 million	($0.29)	-2.25
PENN Entertainment	$6.58 billion	0.30	-$311.50 million	($6.35)	-2.32

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

Analyst Ratings

This is a breakdown of current ratings and price targets for PLAYSTUDIOS and PENN Entertainment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PLAYSTUDIOS	2	1	2	0	2.00
PENN Entertainment	3	5	10	0	2.39

PLAYSTUDIOS currently has a consensus target price of $2.00, suggesting a potential upside of 206.98%. PENN Entertainment has a consensus target price of $21.25, suggesting a potential upside of 44.07%. Given PLAYSTUDIOS’s higher possible upside, equities analysts clearly believe PLAYSTUDIOS is more favorable than PENN Entertainment.

Profitability

This table compares PLAYSTUDIOS and PENN Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PLAYSTUDIOS	-15.10%	-8.71%	-6.77%
PENN Entertainment	-13.24%	-4.59%	-0.83%

Institutional & Insider Ownership

37.5% of PLAYSTUDIOS shares are owned by institutional investors. Comparatively, 91.7% of PENN Entertainment shares are owned by institutional investors. 14.7% of PLAYSTUDIOS shares are owned by company insiders. Comparatively, 2.7% of PENN Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

PLAYSTUDIOS has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, PENN Entertainment has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.

Summary

PENN Entertainment beats PLAYSTUDIOS on 9 of the 14 factors compared between the two stocks.

About PLAYSTUDIOS

PLAYSTUDIOS, Inc. develops and publishes free-to-play casual games for mobile and social platforms in the United States and internationally. The company's game portfolio includes a diverse range of titles comprising social casino, card, puzzle, and adventure games. It also offers POP! Slots, myVEGAS Slots, my KONAMI Slots, MGM Slots Live, myVEGAS Blackjack, myVEGAS Bingo, Tetris, Solitaire, Spider Solitaire, Jumbline 2, Sudoku, and Mahjong games. PLAYSTUDIOS, Inc. is headquartered in Las Vegas, Nevada.

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.