Sphere Entertainment (NYSE:SPHR) versus Pearson (NYSE:PSO) Head-To-Head Analysis

Pearson (NYSE:PSO) and Sphere Entertainment (NYSE:SPHR) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Risk & Volatility

Pearson has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, Sphere Entertainment has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500.

Valuation and Earnings

This table compares Pearson and Sphere Entertainment”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pearson	$4.54 billion	1.98	$554.61 million	N/A	N/A
Sphere Entertainment	$1.03 billion	3.25	-$200.65 million	($5.17)	-18.28

Pearson has higher revenue and earnings than Sphere Entertainment.

Profitability

This table compares Pearson and Sphere Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pearson	N/A	N/A	N/A
Sphere Entertainment	-13.87%	-17.20%	-8.89%

Institutional and Insider Ownership

2.1% of Pearson shares are held by institutional investors. Comparatively, 92.0% of Sphere Entertainment shares are held by institutional investors. 0.1% of Pearson shares are held by company insiders. Comparatively, 22.1% of Sphere Entertainment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Pearson and Sphere Entertainment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pearson	0	2	2	1	2.80
Sphere Entertainment	2	4	7	0	2.38

Pearson presently has a consensus price target of $18.00, indicating a potential upside of 27.03%. Sphere Entertainment has a consensus price target of $78.70, indicating a potential downside of 16.72%. Given Pearson’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Pearson is more favorable than Sphere Entertainment.

Summary

Pearson beats Sphere Entertainment on 8 of the 13 factors compared between the two stocks.

About Pearson

Pearson plc offers educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally. The company operates through five segments: Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills, and Higher Education. The Assessment & Qualifications segment offers Pearson VUE, US student assessment, clinical assessment, UK GCSE, and A levels and international academic qualifications and associated courseware. The Virtual Learning segment provides virtual schools and online program management services. The English Language Learning segment offers Pearson test of English, institutional courseware, and English online solutions. The Workforce Skills offers BTEC, GED, TalentLens, Faethm, Credly, Pearson college, and apprenticeships. The Higher Education segment engages in the US, Canadian, and international higher education courseware businesses. The company was founded in 1844 and is headquartered in London, the United Kingdom.

About Sphere Entertainment

Sphere Entertainment Co. engages in the entertainment business. It produces, presents, or hosts various live entertainment events, including concerts, family shows, and special events, as well as sporting events, such as professional boxing, college basketball and hockey, professional bull riding, mixed martial arts, and esports and wrestling in its venues, including The Garden, Hulu Theater, Radio City Music Hall, and the Beacon Theatre in New York City; and The Chicago Theatre. The company also operates entertainment dining and nightlife venues markets under the Tao, Marquee, Lavo, Beauty & Essex, Cathédrale, Hakkasan, and Omnia brand names. The company was formerly known as Madison Square Garden Entertainment Corp. and changed its name to Sphere Entertainment Co. in April 2023. Sphere Entertainment Co. was founded in 2006 and is based in New York, New York.