Head to Head Analysis: Skillsoft (NYSE:SKIL) and Electronic Arts (NASDAQ:EA)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Electronic Arts and Skillsoft, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Electronic Arts	0	8	11	1	2.65
Skillsoft	0	1	2	0	2.67

Electronic Arts presently has a consensus price target of $165.37, indicating a potential upside of 13.03%. Skillsoft has a consensus price target of $35.00, indicating a potential upside of 46.08%. Given Skillsoft’s stronger consensus rating and higher probable upside, analysts clearly believe Skillsoft is more favorable than Electronic Arts.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Electronic Arts	14.12%	18.56%	10.48%
Skillsoft	-62.85%	-53.74%	-7.53%

Earnings & Valuation

This table compares Electronic Arts and Skillsoft”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Electronic Arts	$7.41 billion	5.18	$1.27 billion	$3.89	37.61
Skillsoft	$534.78 million	0.37	-$349.29 million	($41.50)	-0.58

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

Insider and Institutional Ownership

90.2% of Electronic Arts shares are held by institutional investors. Comparatively, 87.0% of Skillsoft shares are held by institutional investors. 0.2% of Electronic Arts shares are held by company insiders. Comparatively, 13.5% of Skillsoft shares are held by company 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.

Volatility & Risk

Electronic Arts has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, Skillsoft has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Summary

Electronic Arts beats Skillsoft on 11 of the 15 factors compared between the two stocks.

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.

About Skillsoft

Skillsoft Corp. provides content and platform and instructor-led training services in the United States and internationally. The company's Content & Platform segment engages in the sale, marketing, and delivery of its content learning solutions in areas, such as leadership and business, technology and developer, and compliance comprising individualized coaching, as well as technical skill areas. This segment also offers Percipio, an AI-driven online learning platform that delivers a learning experience through SaaS solutions. Its Instructor-Led Training segment provides training solutions, including information technology and business skills for corporations and their employees by guiding its customers throughout their lifelong technology learning journey by offering relevant and up-to-date skills training through instructor-led and self-paced, vendor certified, and other proprietary offerings. The company markets and sells their offerings to businesses of many sizes, government agencies, educational institutions, and resellers. Skillsoft Corp. is headquartered in Greenwood Village, Colorado.