Critical Contrast: Simplicity Esports and Gaming (OTCMKTS:WINR) versus DraftKings (NASDAQ:DKNG)

DraftKings (NASDAQ:DKNG) and Simplicity Esports and Gaming (OTCMKTS:WINR) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.

Profitability

This table compares DraftKings and Simplicity Esports and Gaming’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DraftKings	-5.63%	-30.06%	-6.80%
Simplicity Esports and Gaming	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings for DraftKings and Simplicity Esports and Gaming, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DraftKings	3	2	26	0	2.74
Simplicity Esports and Gaming	0	0	0	0	0.00

DraftKings presently has a consensus price target of $52.34, suggesting a potential upside of 87.08%. Given DraftKings’ stronger consensus rating and higher probable upside, analysts plainly believe DraftKings is more favorable than Simplicity Esports and Gaming.

Insider & Institutional Ownership

37.7% of DraftKings shares are held by institutional investors. 51.2% of DraftKings shares are held by company insiders. Comparatively, 15.4% of Simplicity Esports and Gaming shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares DraftKings and Simplicity Esports and Gaming”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DraftKings	$4.77 billion	2.91	-$507.29 million	($0.65)	-43.05
Simplicity Esports and Gaming	N/A	N/A	N/A	($1.79)	0.00

Simplicity Esports and Gaming has lower revenue, but higher earnings than DraftKings. DraftKings is trading at a lower price-to-earnings ratio than Simplicity Esports and Gaming, indicating that it is currently the more affordable of the two stocks.

Summary

DraftKings beats Simplicity Esports and Gaming on 7 of the 10 factors compared between the two stocks.

About DraftKings

DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States and internationally. It provides online sports betting and casino, daily fantasy sports, media, and other consumer products, as well as retails sportsbooks. The company also engages in the design and development of sports betting and casino gaming software for online and retail sportsbooks, and iGaming operators. In addition, it offers DraftKings marketplace, a digital collectibles ecosystem designed for mainstream accessibility that offers curated NFT drops and supports secondary-market transactions. The company is headquartered in Boston, Massachusetts.

About Simplicity Esports and Gaming

Simplicity Esports and Gaming Company operates as an esports company in the United States and Brazil. It owns and manages professional esports teams, such as Flamengo Esports, one of the top League of Legends team in Latin America. It holds online, play-at-home esports tournaments, allowing gamers to compete for cash and prizes from the comfort of their homes. It also collects and royalty from over 40 esports gaming centers, owned by franchisees. The centers blend the latest high performance gaming PCs and consoles for casual and competitive gaming, sales of gaming related merchandise and equipment, and organized grassroots leagues and tournaments.