Critical Review: GameStop (NYSE:GME) and Super Group (SGHC) (NYSE:SGHC)

Super Group (SGHC) (NYSE:SGHC) and GameStop (NYSE:GME) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Institutional & Insider Ownership

5.1% of Super Group (SGHC) shares are owned by institutional investors. Comparatively, 29.2% of GameStop shares are owned by institutional investors. 10.4% of Super Group (SGHC) shares are owned by insiders. Comparatively, 8.6% of GameStop shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Super Group (SGHC) and GameStop, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Super Group (SGHC)	0	1	7	2	3.10
GameStop	1	1	0	0	1.50

Super Group (SGHC) currently has a consensus target price of $16.75, suggesting a potential upside of 57.35%. GameStop has a consensus target price of $13.50, suggesting a potential downside of 44.58%. Given Super Group (SGHC)’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Super Group (SGHC) is more favorable than GameStop.

Risk & Volatility

Super Group (SGHC) has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, GameStop has a beta of 2.12, meaning that its stock price is 112% more volatile than the S&P 500.

Valuation and Earnings

This table compares Super Group (SGHC) and GameStop”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Super Group (SGHC)	$1.84 billion	2.92	$122.38 million	$0.43	24.76
GameStop	$3.82 billion	2.85	$131.30 million	$0.82	29.71

GameStop has higher revenue and earnings than Super Group (SGHC). Super Group (SGHC) is trading at a lower price-to-earnings ratio than GameStop, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Super Group (SGHC) and GameStop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Super Group (SGHC)	10.05%	43.14%	25.20%
GameStop	11.08%	9.75%	5.80%

Summary

Super Group (SGHC) beats GameStop on 8 of the 15 factors compared between the two stocks.

About Super Group (SGHC)

Super Group (SGHC) Limited operates as an online sports betting and gaming operator. It offers Betway, an online sports betting brand; and Spin, a multi-brand online casino offering. Super Group (SGHC) Limited is based in Saint Peter Port, Guernsey.

About GameStop

GameStop Corp., a specialty retailer, provides games and entertainment products through its stores and ecommerce platforms in the United States, Canada, Australia, and Europe. The company sells new and pre-owned gaming platforms; accessories, such as controllers, gaming headsets, and virtual reality products; new and pre-owned gaming software; and in-game digital currency, digital downloadable content, and full-game downloads. It sells collectibles comprising apparel, toys, trading cards, gadgets, and other retail products for pop culture and technology enthusiasts, as well as engages in the digital asset wallet and NFT marketplace activities. The company operates stores and ecommerce sites under the GameStop, EB Games, and Micromania brands; and pop culture themed stores that sell collectibles, apparel, gadgets, electronics, toys, and other retail products under the Zing Pop Culture brand, as well as offers Game Informer magazine, a print and digital gaming publication. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1996 and is headquartered in Grapevine, Texas.