Head-To-Head Comparison: PENN Entertainment (NASDAQ:PENN) versus Galaxy Gaming (OTCMKTS:GLXZ)

Galaxy Gaming (OTCMKTS:GLXZ) and PENN Entertainment (NASDAQ:PENN) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Galaxy Gaming	-3.02%	N/A	-2.99%
PENN Entertainment	-12.11%	-1.94%	-0.32%

Risk & Volatility

Galaxy Gaming has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, PENN Entertainment has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Insider and Institutional Ownership

0.4% of Galaxy Gaming shares are owned by institutional investors. Comparatively, 91.7% of PENN Entertainment shares are owned by institutional investors. 21.9% of Galaxy Gaming shares are owned by insiders. Comparatively, 2.7% of PENN Entertainment shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Galaxy Gaming and PENN Entertainment, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Galaxy Gaming	0	0	0	0	0.00
PENN Entertainment	1	8	7	0	2.38

PENN Entertainment has a consensus price target of $19.36, indicating a potential upside of 29.65%. Given PENN Entertainment’s stronger consensus rating and higher probable upside, analysts plainly believe PENN Entertainment is more favorable than Galaxy Gaming.

Valuation & Earnings

This table compares Galaxy Gaming and PENN Entertainment”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Galaxy Gaming	$31.74 million	1.21	-$2.63 million	($0.03)	-50.67
PENN Entertainment	$6.96 billion	0.29	-$843.10 million	($6.02)	-2.48

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

Summary

PENN Entertainment beats Galaxy Gaming on 8 of the 14 factors compared between the two stocks.

About Galaxy Gaming

Galaxy Gaming, Inc., a gaming company, designs, develops, acquires, assembles, markets, and licenses proprietary casino table games and associated technology, platforms, and systems for the casino gaming industry. The company's proprietary table games comprise side bets, which are proprietary features and wagering options added to public domain games, such as baccarat, pai gow poker, craps, and blackjack table games under the Lucky Ladies, 21+3, Bonus Craps, and EZ Baccarat titles; and premium games, which are stand-alone games with their own set of rules and strategies under the Heads Up Hold 'em, High Card Flush, Cajun Stud, and Three Card Poker names. It also provides enhanced table systems, which include Bonus Jackpot System, an electronic system installed on gaming tables designed to collect data by detecting player wagers and other game activities. In addition, the company offers automated electronic tables and other ancillary equipment, as well as relicenses various game titles to operators of online gaming systems. It markets its products to online casinos worldwide; land-based casino gaming companies in North America, the Caribbean, Central America, the United Kingdom, Europe, and Africa; and cruise ship companies. The company was founded in 2006 and 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.