Five9 (NASDAQ: FIVN) and Electronic Arts (NASDAQ:EA) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Valuation & Earnings

This table compares Five9 and Electronic Arts’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Five9 $179.93 million 7.49 $2.12 million ($0.23) -106.26
Electronic Arts $5.02 billion 7.13 $1.58 billion $3.74 31.01

Electronic Arts has higher revenue and earnings than Five9. Five9 is trading at a lower price-to-earnings ratio than Electronic Arts, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Five9 and Electronic Arts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Five9 -7.08% -42.91% -11.76%
Electronic Arts 23.31% 29.77% 15.74%

Insider and Institutional Ownership

91.2% of Five9 shares are held by institutional investors. Comparatively, 93.8% of Electronic Arts shares are held by institutional investors. 9.1% of Five9 shares are held by insiders. Comparatively, 2.6% of Electronic Arts shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Five9 has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500. Comparatively, Electronic Arts has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Five9 and Electronic Arts, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Five9 1 1 5 0 2.57
Electronic Arts 0 3 22 0 2.88

Five9 currently has a consensus price target of $22.86, suggesting a potential downside of 6.48%. Electronic Arts has a consensus price target of $121.18, suggesting a potential upside of 4.48%. Given Electronic Arts’ stronger consensus rating and higher probable upside, analysts plainly believe Electronic Arts is more favorable than Five9.

Summary

Electronic Arts beats Five9 on 11 of the 13 factors compared between the two stocks.

Five9 Company Profile

Five9 Inc. (Five9) is a provider of cloud software for contact centers. The Company’s purpose-built Virtual Contact Center (VCC) cloud platform delivers a suite of applications that enable the breadth of contact center-related customer service, sales and marketing functions. The Company’s solution, which consists of its VCC cloud platform and applications, allows simultaneous management and optimization of customer interactions across voice, chat, e-mail, Web, social media and mobile channels, either directly or through its application programming interfaces (APIs). The Company’s VCC cloud platform matches each customer interaction with an appropriate agent resource and delivers relevant customer data to the agent in real-time through integrations with adjacent enterprise applications, such as customer relationship management (CRM) software, to optimize the customer experience and agent productivity.

Electronic Arts Company Profile

Electronic Arts Inc. develops, markets, publishes and distributes games, content and services that can be played by consumers on a range of platforms, which include consoles, personal computers (PCs), mobile phones and tablets. The Company’s games and services are based on a portfolio of intellectual property that includes established brands, such as FIFA, Madden NFL, Star Wars, Battlefield, the Sims and Need for Speed. The Company markets and sells its games and services through retail channels and through digital distribution channels. The Company’s PC games and additional content can be downloaded directly through its Origin online platform, as well as through third-party online download stores. Its mobile, tablet and PC free-to-download games and additional content are available through third-party application storefronts, such as the Apple Application Store and Google Play.

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