Critical Analysis: Summer Infant (SUMR) versus Take-Two Interactive Software (TTWO)
Summer Infant (NASDAQ: SUMR) and Take-Two Interactive Software (NASDAQ:TTWO) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.
Volatility & Risk
Summer Infant has a beta of -0.11, meaning that its share price is 111% less volatile than the S&P 500. Comparatively, Take-Two Interactive Software has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.
This is a summary of recent ratings and price targets for Summer Infant and Take-Two Interactive Software, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Take-Two Interactive Software||1||3||14||0||2.72|
Summer Infant currently has a consensus price target of $2.75, indicating a potential upside of 47.85%. Take-Two Interactive Software has a consensus price target of $85.59, indicating a potential downside of 4.16%. Given Summer Infant’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Summer Infant is more favorable than Take-Two Interactive Software.
Insider & Institutional Ownership
50.0% of Summer Infant shares are owned by institutional investors. Comparatively, 97.3% of Take-Two Interactive Software shares are owned by institutional investors. 8.4% of Summer Infant shares are owned by insiders. Comparatively, 1.6% of Take-Two Interactive Software 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.
Earnings & Valuation
This table compares Summer Infant and Take-Two Interactive Software’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Summer Infant||$194.00 million||0.18||$4.68 million||($0.19)||-9.79|
|Take-Two Interactive Software||$1.89 billion||5.00||$247.14 million||$1.46||61.16|
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.
This table compares Summer Infant and Take-Two Interactive Software’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%|
Take-Two Interactive Software beats Summer Infant on 10 of the 13 factors compared between the two stocks.
About Summer Infant
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.
About Take-Two Interactive Software
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.
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