Summer Infant (NASDAQ: SUMR) and Take-Two Interactive Software (NASDAQ:TTWO) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.

Profitability

This table compares Summer Infant and Take-Two Interactive Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summer Infant -1.82% 0.56% 0.09%
Take-Two Interactive Software 8.73% 28.89% 8.15%

Volatility & Risk

Summer Infant has a beta of -0.11, suggesting that its share price is 111% less volatile than the S&P 500. Comparatively, Take-Two Interactive Software has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Insider and Institutional Ownership

50.0% of Summer Infant shares are held by institutional investors. Comparatively, 95.6% of Take-Two Interactive Software shares are held by institutional investors. 8.4% of Summer Infant shares are held by insiders. Comparatively, 1.6% of Take-Two Interactive Software shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Summer Infant and Take-Two Interactive Software’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Summer Infant $194.00 million 0.18 $4.68 million ($0.19) -10.16
Take-Two Interactive Software $1.89 billion 5.01 $247.14 million $1.46 62.13

Take-Two Interactive Software has higher revenue and earnings than Summer Infant. Summer Infant is trading at a lower price-to-earnings ratio than Take-Two Interactive Software, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Summer Infant and Take-Two Interactive Software, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summer Infant 0 0 2 0 3.00
Take-Two Interactive Software 1 3 14 0 2.72

Summer Infant currently has a consensus price target of $2.75, suggesting a potential upside of 42.49%. Take-Two Interactive Software has a consensus price target of $85.59, suggesting a potential downside of 5.65%. Given Summer Infant’s stronger consensus rating and higher probable upside, equities analysts clearly believe Summer Infant is more favorable than Take-Two Interactive Software.

Summary

Take-Two Interactive Software beats Summer Infant on 10 of the 13 factors compared between the two stocks.

Summer Infant Company Profile

Summer Infant, Inc. is an infant and juvenile products company. The Company is engaged in the juvenile industry, providing mothers and caregivers a range of products to care for babies and toddlers. As of December 31, 2016, it marketed over 1,100 products in several product categories, including monitoring, safety, nursery, baby gear and feeding products. It markets its products, under its Summer Infant, SwaddleMe and Born Free brand names. Its anchor products in its product categories include monitoring, such as wireless fidelity (Wi-Fi)/Internet, video, audio and prenatal; safety, including gates, bath, potties, boosters and positioners; nursery, such as swaddle, travel accessories, safe sleep, soothers and sleep aides; baby gear, including strollers, bassinets, high chairs and playards, and feeding products, such as bottles, drinking cups, bibs and placemats, electronics and pacifiers. It sells its products across the globe to national retailers, as well as independent retailers.

Take-Two Interactive Software Company Profile

Take-Two Interactive Software, Inc. is a developer, publisher and marketer of entertainment for consumers around the world. The Company develops and publishes products through its labels, Rockstar Games and 2K. It operates through publishing segment. It has a portfolio of software content for the hardware platforms in a range of genres, including action, adventure, family/casual, racing, role-playing, shooter, sports and strategy, which it distributes across the world. The Company’s products are designed for console gaming systems, such as PlayStation 3 and PlayStation 4; Xbox 360 and Xbox One, and personal computers, including smartphones and tablets. Rockstar Games is the developer and publisher of Grand Theft Auto, as well as other franchises, including L.A. Noire, Max Payne, Midnight Club and Red Dead. 2K publishes owned and licensed titles across a range of genres. It has internal development studios in Canada, China, Czech Republic, the United Kingdom and the United States.

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