Head-To-Head Comparison: Electronic Arts (NASDAQ:EA) vs. DraftKings (NASDAQ:DKNG)

DraftKings (NASDAQ:DKNG) and Electronic Arts (NASDAQ:EA) are both large-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Valuation & Earnings

This table compares DraftKings and Electronic Arts”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DraftKings	$5.46 billion	2.50	-$507.29 million	($0.57)	-48.00
Electronic Arts	$7.46 billion	6.71	$1.12 billion	$2.66	75.20

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

Risk & Volatility

DraftKings has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500. Comparatively, Electronic Arts has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Insider and Institutional Ownership

37.7% of DraftKings shares are owned by institutional investors. Comparatively, 90.2% of Electronic Arts shares are owned by institutional investors. 51.2% of DraftKings shares are owned by company insiders. Comparatively, 0.2% of Electronic Arts shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DraftKings	-4.90%	-22.84%	-4.63%
Electronic Arts	9.31%	23.53%	11.78%

Analyst Recommendations

This is a summary of recent recommendations for DraftKings and Electronic Arts, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DraftKings	1	7	23	0	2.71
Electronic Arts	1	20	4	0	2.12

DraftKings presently has a consensus price target of $45.79, indicating a potential upside of 67.38%. Electronic Arts has a consensus price target of $186.95, indicating a potential downside of 6.54%. Given DraftKings’ stronger consensus rating and higher possible upside, equities analysts clearly believe DraftKings is more favorable than Electronic Arts.

Summary

Electronic Arts beats DraftKings on 9 of the 14 factors compared between the two stocks.

About DraftKings

DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States and internationally. It provides online sports betting and casino, daily fantasy sports, media, and other consumer products, as well as retails sportsbooks. The company also engages in the design and development of sports betting and casino gaming software for online and retail sportsbooks, and iGaming operators. In addition, it offers DraftKings marketplace, a digital collectibles ecosystem designed for mainstream accessibility that offers curated NFT drops and supports secondary-market transactions. The company is headquartered in Boston, Massachusetts.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It develops and publishes games and services across various genres, such as sports, racing, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Need for Speed, and license games from others, including FIFA, Madden NFL, UFC, and Star Wars brands. The company licenses its games to third parties to distribute and host its games. It markets and sells its games and services through digital distribution and retail channels, as well as directly to mass market retailers, specialty stores, and distribution arrangements. Electronic Arts Inc. was incorporated in 1982 and is headquartered in Redwood City, California.