iQIYI (NASDAQ:IQ – Get Free Report) and Take-Two Interactive Software (NASDAQ:TTWO – Get Free Report) are both communication services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.
Valuation and Earnings
This table compares iQIYI and Take-Two Interactive Software”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| iQIYI | $25.99 billion | 0.04 | -$29.50 million | ($0.12) | -8.42 |
| Take-Two Interactive Software | $6.66 billion | 5.69 | -$298.20 million | ($1.73) | -117.07 |
Institutional & Insider Ownership
52.7% of iQIYI shares are held by institutional investors. Comparatively, 95.5% of Take-Two Interactive Software shares are held by institutional investors. 57.8% of iQIYI shares are held by company insiders. Comparatively, 1.1% of Take-Two Interactive Software shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Risk and Volatility
iQIYI has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, Take-Two Interactive Software has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and price targets for iQIYI and Take-Two Interactive Software, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| iQIYI | 1 | 4 | 1 | 0 | 2.00 |
| Take-Two Interactive Software | 1 | 1 | 18 | 1 | 2.90 |
iQIYI currently has a consensus price target of $1.73, suggesting a potential upside of 71.29%. Take-Two Interactive Software has a consensus price target of $298.89, suggesting a potential upside of 47.58%. Given iQIYI’s higher possible upside, research analysts plainly believe iQIYI is more favorable than Take-Two Interactive Software.
Profitability
This table compares iQIYI and Take-Two Interactive Software’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| iQIYI | -3.24% | -6.29% | -1.78% |
| Take-Two Interactive Software | -4.79% | 12.25% | 4.46% |
Summary
Take-Two Interactive Software beats iQIYI on 8 of the 15 factors compared between the two stocks.
About iQIYI
iQIYI, Inc., together with its subsidiaries, provides online entertainment video services in the People's Republic of China. It offers various products and services, including online video, online games, online literature, animations, and other products. The company operates a platform that provides a collection of internet video content, such as professionally produced content licensed from professional content providers and self-produced content. It also offers membership, online advertising, content distribution, and live broadcasting services. In addition, the company operates iQIYI Show, a live broadcasting platform that enables users to follow their favorite hosts and shows in real time through live broadcasting; and iQIYI Lite that offers an easy and quick access to the personalized videos based on their user preferences. Further, it is involved in the talent agency and IP licensing activities, as well as engages in developing a video community app. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu, Inc.
About Take-Two Interactive Software
Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment solutions for consumers worldwide. It develops and publishes action/adventure products under the Grand Theft Auto, LA Noire, Max Payne, Midnight Club, and Red Dead Redemption names, as well as other franchises. The company also publishes various entertainment properties across various platforms and a range of genres, such as shooter, action, role-playing, strategy, sports, and family/casual entertainment under the BioShock, Mafia, Sid Meier’s Civilization, XCOM series, Borderlands, and Tiny Tina’s Wonderland names. In addition, it publishes sports simulation titles comprising NBA 2K series, a basketball video game; the WWE 2K professional wrestling series; mobile titles, including WWE SuperCard; and PGA TOUR 2K. Further, the company offers Kerbal Space Program and OlliOlli World; free-to-play mobile games, such as CSR Racing, Dragon City, Empires & Puzzles, FarmVille, Golf Rival, Harry Potter: Puzzles & Spells, Match Factory!, Merge Dragons!, Merge Magic!, Monster Legends, Toon Blast, Top Eleven, Top Troops, Toy Blast, Two Dots, Words With Friends, and Zynga Poker; and hyper-casual mobile titles, including Fill the Fridge!, Parking Jam 3D, Power Slap, Pull the Pin, Twisted Tangle, and Tangled Snakes. Its products are designed for console gaming systems; personal computers; and mobiles comprising smartphones and tablets. The company provides its products through physical retail, digital download, online platforms, and cloud streaming services. Take-Two Interactive Software, Inc. was incorporated in 1993 and is based in New York, New York.
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