Analyzing The Arena Group (NYSE:AREN) and GameSquare (NASDAQ:GAME)

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

Institutional & Insider Ownership

85.6% of The Arena Group shares are owned by institutional investors. Comparatively, 64.2% of GameSquare shares are owned by institutional investors. 73.1% of The Arena Group shares are owned by company insiders. Comparatively, 6.8% of GameSquare shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for The Arena Group and GameSquare, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Arena Group	0	1	0	0	2.00
GameSquare	1	0	1	1	2.67

The Arena Group presently has a consensus target price of $2.00, indicating a potential upside of 78.57%. Given The Arena Group’s higher probable upside, equities research analysts clearly believe The Arena Group is more favorable than GameSquare.

Earnings & Valuation

This table compares The Arena Group and GameSquare”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Arena Group	$100.59 million	0.53	-$55.58 million	$0.19	5.89
GameSquare	$45.00 million	0.86	-$40.10 million	($4.96)	-0.60

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

Volatility and Risk

The Arena Group has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, GameSquare has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.

Profitability

This table compares The Arena Group and GameSquare’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Arena Group	-70.59%	N/A	-15.23%
GameSquare	-96.06%	7.97%	3.14%

Summary

GameSquare beats The Arena Group on 8 of the 15 factors compared between the two stocks.

About The Arena Group

The Arena Group Holdings, Inc., together with its subsidiaries, operates digital media platform in the United States and internationally. The company offers the Platform, a proprietary online publishing platform comprising publishing tools, video platforms, social distribution channels, newsletter technology, machine learning content recommendations, notifications, and other technology. The company also offers content from individual creators to the HubPages network of premium content channels, such as PetHelpful, dengarden and Fashionista for writers, explorers, knowledge seekers, and conversation starters to connect in an interactive and informative online space under the HubPages brand. In addition, it operates the media business for Sports Illustrated brand. Further, the company owns and operates brands, including TheStreet, a financial news and information provider to investors and institutions, and produces business news and market analysis for individual investors; The Spun, an online independent sports publication; Parade, an entertainment coverage with stories and health content; and Men's Journal, a suite of digital assets that provides audience with access to premium active lifestyle brands. The company was formerly known as TheMaven, Inc. and changed its name to The Arena Group Holdings, Inc. in February 2022. The company is based in New York, New York. The Arena Group Holdings, Inc. operates as a subsidiary of Authentic Brands Group Inc.

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.