Rosetta Stone (RST) & Electronic Arts (EA) Head to Head Comparison

Rosetta Stone (NYSE: RST) and Electronic Arts (NASDAQ:EA) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Valuation & Earnings

This table compares Rosetta Stone and Electronic Arts’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rosetta Stone $194.09 million 1.45 -$27.55 million ($0.42) -30.00
Electronic Arts $4.85 billion 7.19 $967.00 million $3.79 29.85

Electronic Arts has higher revenue and earnings than Rosetta Stone. Rosetta Stone 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 & Institutional Ownership

72.2% of Rosetta Stone shares are owned by institutional investors. Comparatively, 93.5% of Electronic Arts shares are owned by institutional investors. 14.5% of Rosetta Stone shares are owned by company insiders. Comparatively, 2.6% of Electronic Arts shares are owned 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Rosetta Stone and Electronic Arts, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rosetta Stone 0 0 1 0 3.00
Electronic Arts 0 4 22 0 2.85

Rosetta Stone currently has a consensus price target of $15.00, suggesting a potential upside of 19.05%. Electronic Arts has a consensus price target of $123.30, suggesting a potential upside of 8.99%. Given Rosetta Stone’s stronger consensus rating and higher possible upside, equities analysts plainly believe Rosetta Stone is more favorable than Electronic Arts.

Profitability

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

Net Margins Return on Equity Return on Assets
Rosetta Stone -4.97% N/A -3.43%
Electronic Arts 23.35% 28.92% 15.51%

Volatility & Risk

Rosetta Stone has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Electronic Arts has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

Summary

Electronic Arts beats Rosetta Stone on 10 of the 14 factors compared between the two stocks.

Rosetta Stone Company Profile

Rosetta Stone Inc. (Rosetta Stone) offers personalized language and reading programs. The Company’s solutions are used by schools, businesses, government organizations and individuals around the world. Its segments include Enterprise & Education, which derives revenues from sales to educational institutions, corporations and government agencies worldwide, and Consumer, which derives revenue from sales to individuals and retail partners. Its cloud-based programs allow users to learn online or on-the-go via tablet or smartphone, whether in a classroom, corporate setting, or personal learning environment. Its Fit Brains business offers personalized brain training programs. The Company offers courses in over 30 languages across formats, including Web-based software subscriptions, digital downloads, mobile applications, and perpetual compact disc packages. It also offers a portfolio of technology-based learning products for personal use to the global consumer.

Electronic Arts Company Profile

Electronic Arts Inc. develops, markets, publishes and distributes games, content and services that can be played by consumers on a range of platforms, which include consoles, personal computers (PCs), mobile phones and tablets. The Company’s games and services are based on a portfolio of intellectual property that includes established brands, such as FIFA, Madden NFL, Star Wars, Battlefield, the Sims and Need for Speed. The Company markets and sells its games and services through retail channels and through digital distribution channels. The Company’s PC games and additional content can be downloaded directly through its Origin online platform, as well as through third-party online download stores. Its mobile, tablet and PC free-to-download games and additional content are available through third-party application storefronts, such as the Apple Application Store and Google Play.

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