Comparing Skillz (NYSE:SKLZ) and Gravity (NASDAQ:GRVY)

Gravity (NASDAQ:GRVY) and Skillz (NYSE:SKLZ) are both small-cap 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.

Volatility & Risk

Gravity has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, Skillz has a beta of 2.78, indicating that its stock price is 178% more volatile than the S&P 500.

Valuation & Earnings

This table compares Gravity and Skillz’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gravity	$555.74 million	0.99	$105.61 million	$13.23	5.98
Skillz	$150.11 million	0.92	-$106.69 million	($5.11)	-1.26

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Gravity and Skillz, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gravity	0	0	0	0	N/A
Skillz	0	3	2	0	2.40

Skillz has a consensus price target of $10.25, suggesting a potential upside of 59.04%. Given Skillz’s higher possible upside, analysts plainly believe Skillz is more favorable than Gravity.

Profitability

This table compares Gravity and Skillz’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gravity	16.96%	46.65%	36.71%
Skillz	-78.69%	-48.43%	-26.29%

Insider & Institutional Ownership

9.9% of Gravity shares are owned by institutional investors. Comparatively, 19.4% of Skillz shares are owned by institutional investors. 22.7% of Skillz 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.

Summary

Gravity beats Skillz on 8 of the 13 factors compared between the two stocks.

About Gravity

Gravity Co., Ltd. develops and publishes online and mobile games in South Korea, Taiwan, Thailand, and the United States. The company offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Prequel II. Its mobile games portfolio includes Ragnarok M: Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; and Paladog Tactics. The company 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; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin; and markets dolls, stationery, food, and other character-based merchandises, as well as game manuals, monthly magazines, and other publications. 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.

About Skillz

Skillz Inc. operates a mobile game platform in the United States and internationally. The company primarily develops and supports a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity to end-users. The company distributes games through direct app download from its website, as well as through third-party platforms. Skillz Inc. was founded in 2012 and is based in San Francisco, California.