Critical Analysis: GRAVITY (NASDAQ:GRVY) versus GCL Global (NASDAQ:GCL)

GCL Global (NASDAQ:GCL) and GRAVITY (NASDAQ:GRVY) are both small-cap communication services companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Profitability

This table compares GCL Global and GRAVITY’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GCL Global	N/A	N/A	N/A
GRAVITY	14.92%	12.70%	10.85%

Insider and Institutional Ownership

36.5% of GCL Global shares are held by institutional investors. Comparatively, 9.9% of GRAVITY shares are held by institutional investors. 49.4% of GCL Global shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for GCL Global and GRAVITY, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCL Global	1	0	0	0	1.00
GRAVITY	0	1	0	0	2.00

Risk and Volatility

GCL Global has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, GRAVITY has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Valuation & Earnings

This table compares GCL Global and GRAVITY”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GCL Global	$238.92 million	0.55	-$25.00 million	$0.01	101.99
GRAVITY	$388.04 million	1.19	$47.22 million	$8.15	8.16

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

Summary

GRAVITY beats GCL Global on 9 of the 11 factors compared between the two stocks.

About GCL Global

GCL Global Holdings Ltd. unites people through immersive games and entertainment experiences, enabling creators to deliver engaging content and fun gameplay experiences to gaming communities worldwide with a strategic focus on the rapidly expanding Asian gaming market.

Drawing on a deep understanding of gaming trends and market dynamics, GCL Group leverages its diverse portfolio of digital and physical content to bridge cultures and audiences by introducing Asian-developed IP to a global audience across consoles, PCs, and streaming platforms.

About GRAVITY

Gravity Co., Ltd. develops and publishes online and mobile games worldwide. It offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Landverse. Its mobile games portfolio includes Ragnarok M; Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; Ragnarok Arena; WITH ISLAND; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; Generation Zombie; Ragnarok Idle Adventure; Ragnarok 20 Heroes; White Chord; WITH: Whale In The High; Ragnarok Lost Memories; and Paladog Tactics. It also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; Pigromance for Steam, Stove, Nintendo Switch, Xbox One, Xbox Series X|S; ALTF4 11 for Steam and Stove; Wetory for Steam, Stove, Nintedo Switch; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin, and Kongsuni; and markets dolls, stationery, food, and other character based merchandises, as well as game manuals, monthly magazines, and other publications; PC games, including Puzzle Platformer, ALTF42, Ragnarok ZERO, KAMiBAKO-Mythology of Cube, Psychodemic, and FINAL KNIGHT; social network games and mobile games, such as Ragnarok V: Returns, Ragnarok: The Lost Memories and Ragnrok Begins in-house; and web-browser-based games, such as Ragnarok Prequel and Ragnarok Prequel II. Further, the company provides system development and maintenance services, as well as system integration services to third parties. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.