Critical Contrast: Take-Two Interactive Software (TTWO) vs. Summer Infant (SUMR)

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

Profitability

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

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

Analyst Ratings

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

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

Take-Two Interactive Software presently has a consensus price target of $85.59, indicating a potential downside of 5.88%. Summer Infant has a consensus price target of $2.75, indicating a potential upside of 41.75%. Given Summer Infant’s stronger consensus rating and higher probable upside, analysts plainly believe Summer Infant is more favorable than Take-Two Interactive Software.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Take-Two Interactive Software $1.89 billion 5.03 $247.14 million $1.46 62.29
Summer Infant $194.00 million 0.19 $4.68 million ($0.19) -10.21

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.

Risk and Volatility

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

Insider and Institutional Ownership

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

Summary

Take-Two Interactive Software beats Summer Infant on 10 of the 14 factors compared between the two stocks.

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.

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.

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