Comparing GameSquare (NASDAQ:GAME) & Scholastic (NASDAQ:SCHL)

GameSquare (NASDAQ:GAME) and Scholastic (NASDAQ:SCHL) are both small-cap communication services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Insider and Institutional Ownership

64.2% of GameSquare shares are held by institutional investors. Comparatively, 82.6% of Scholastic shares are held by institutional investors. 6.8% of GameSquare shares are held by insiders. Comparatively, 12.8% of Scholastic shares are held 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for GameSquare and Scholastic, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GameSquare	1	0	1	1	2.67
Scholastic	1	2	0	0	1.67

Scholastic has a consensus price target of $42.00, suggesting a potential upside of 20.86%. Given Scholastic’s higher probable upside, analysts plainly believe Scholastic is more favorable than GameSquare.

Profitability

This table compares GameSquare and Scholastic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GameSquare	-96.06%	7.97%	3.14%
Scholastic	3.58%	5.29%	2.43%

Volatility and Risk

GameSquare has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, Scholastic has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Valuation & Earnings

This table compares GameSquare and Scholastic”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GameSquare	$45.00 million	0.94	-$40.10 million	($4.96)	-0.67
Scholastic	$1.58 billion	0.41	$56.70 million	$2.34	14.85

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

Summary

Scholastic beats GameSquare on 8 of the 15 factors compared between the two stocks.

About GameSquare

GameSquare Holdings, Inc. operates as a vertically integrated digital media, entertainment, and technology company. Its platform to connect with gaming and youth culture audiences. The company’s end-to-end platform includes Code Red Esports Ltd., an esports talent agency; GCN, a digital media company focusing on the gaming and esports audience; Zoned, a gaming and lifestyle marketing agency; Complexity Gaming, a esports organization operating; Fourth Frame Studios, a creative production studio; and Mission Supply, a merchandise and consumer products business; Frankly Media, programmatic advertising, Stream Hatchet, live streaming analytics, and Sideqik a social influencer marketing platform. The company also engages in providing marketing and creative services, offering leading data and analytics solutions. The company was formerly known as Engine Gaming & Media, Inc. GameSquare Holdings, Inc. is headquartered in Frisco, Texas.

About Scholastic

Scholastic Corporation publishes and distributes children’s books worldwide. It operates in three segments: Children’s Book Publishing and Distribution, Education Solutions, and International. The Children’s Book Publishing and Distribution segment engages in publication and distribution of children’s print, digital, and audio books, as well as media and interactive products through its school reading events and trade channel; and operation of school-based book clubs and book fairs in the United States. Its original publications include The Harry Potter, The Hunger Games, The Bad Guys, The Baby-Sitters Club, The Magic School Bus, Captain Underpants, Dog Man, Wings of Fire, Cat Kid Comic Club, and Clifford The Big Red Dog, as well as I Survived, Goosebumps; licensed properties comprising the Peppa Pig and Pokemon; and publishes and creates Klutz and Make Believe Ideas titles, such as Mini Shake Shop, Pokemon Stained Glass, LEGO Miniature Photography, and the Never Touch series. The Education Solutions segment publishes and distributes classroom magazines under the Scholastic News, Scholastic Scope, Storyworks, Let’s Find Out, and Junior Scholastic names; supplemental and classroom materials and programs, and related support services; and print and on-line reference, and non-fiction products, as well as consulting services. The International segment publishes and distributes English, Hindi, and French language children’s books; and operates school-based marketing channels, as well as supply original and licensed children’s books, and supplemental educational materials including professional books for teachers. It distributes its products and services directly to schools and libraries through retail stores and the Internet. The company was founded in 1920 and is headquartered in New York, New York.