Scientific Games (NASDAQ:SGMS) and Pareteum (NASDAQ:TEUM) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares Scientific Games and Pareteum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scientific Games -18.25% N/A -1.31%
Pareteum -67.83% -60.67% -43.28%

Analyst Recommendations

This is a summary of recent ratings and target prices for Scientific Games and Pareteum, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scientific Games 1 3 4 0 2.38
Pareteum 0 1 3 0 2.75

Scientific Games presently has a consensus price target of $38.63, indicating a potential upside of 54.75%. Pareteum has a consensus price target of $7.00, indicating a potential upside of 147.35%. Given Pareteum’s stronger consensus rating and higher possible upside, analysts clearly believe Pareteum is more favorable than Scientific Games.

Valuation & Earnings

This table compares Scientific Games and Pareteum’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Scientific Games $3.08 billion 0.74 -$242.30 million ($2.23) -11.19
Pareteum $13.55 million 20.44 -$12.46 million ($0.84) -3.37

Pareteum has lower revenue, but higher earnings than Scientific Games. Scientific Games is trading at a lower price-to-earnings ratio than Pareteum, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

66.0% of Scientific Games shares are held by institutional investors. Comparatively, 6.8% of Pareteum shares are held by institutional investors. 40.5% of Scientific Games shares are held by insiders. Comparatively, 3.4% of Pareteum shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Scientific Games has a beta of 2.24, indicating that its share price is 124% more volatile than the S&P 500. Comparatively, Pareteum has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Summary

Scientific Games beats Pareteum on 8 of the 14 factors compared between the two stocks.

Scientific Games Company Profile

Scientific Games Corporation develops technology-based products and services, and related content for the gaming, lottery, and interactive gaming industries worldwide. The company's Gaming segment sells new and used gaming machines, electronic table systems, video lottery terminals (VLTs), conversion game kits, and spare parts; slot, casino, and table-management systems; table products, including shufflers; and perpetual licenses to proprietary table games. It also leases VLTs and electronic table games, game themes, or other licensing arrangements; and provides installation and support services for casino management systems, such as ongoing hardware maintenance and software upgrade services. The company's Lottery segment designs, prints, and sells instant lottery games, as well as offers instant game-related services comprising game design, sales and marketing support, and inventory management; and provides lottery systems, including hardware, software, and instant game validation systems. It is also involved in supplying player loyalty programs, as well as providing merchandising services and interactive marketing campaigns; and sublicensing brands for lottery products, as well as providing lottery-related promotional products. In addition, this segment provides software, hardware, and related services for lottery operations, including draw systems, instant ticket validation systems, and sports wagering and keno systems; and lottery systems software maintenance and support services. The company's Interactive segment operates social casino-style, slot-based, and bingo-based games through Facebook, iOS, Android, and various other desktop and mobile platforms; and provides content through remote game server technology, to licensed online casino operators on desktop and mobile platforms, as well as play-for-fun and play-for-free white-label gaming for land-based casinos. Scientific Games Corporation was founded in 1984 and is headquartered in Las Vegas, Nevada.

Pareteum Company Profile

Pareteum Corporation operates a communications cloud services platform in Europe and internationally. Its platform provides mobility, messaging, and security services and applications, with a single-sign-on, application program interface (API), and software development suite. The company's platform hosts integrated IT/back office and core network functionality for mobile network operators, as well as for enterprises to implement and leverage mobile communications solutions on a SaaS, PaaS, or IaaS basis. It also offers operational support system for channel partners with APIs for integration with third party systems, workflows for complex application orchestration, and customer support with branded portals and plug-ins for various other applications. Pareteum Corporation serves the markets of Internet of Things, mobile virtual network operators, smart cities, and application developers. The company was formerly known as Elephant Talk Communications Corp. and changed its name to Pareteum Corporation in November 2016. Pareteum Corporation is based in New York, New York.

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