Square Enix (OTCMKTS:SQNXF – Get Free Report) and WEBTOON Entertainment (NASDAQ:WBTN – Get Free Report) are both communication services companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.
Analyst Recommendations
This is a summary of current ratings and target prices for Square Enix and WEBTOON Entertainment, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Square Enix | 0 | 0 | 0 | 1 | 4.00 |
| WEBTOON Entertainment | 1 | 5 | 1 | 0 | 2.00 |
WEBTOON Entertainment has a consensus target price of $10.88, suggesting a potential upside of 18.72%. Given WEBTOON Entertainment’s higher probable upside, analysts clearly believe WEBTOON Entertainment is more favorable than Square Enix.
Profitability
This table compares Square Enix and WEBTOON Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Square Enix | N/A | N/A | N/A |
| WEBTOON Entertainment | -25.09% | 2.10% | 1.60% |
Risk & Volatility
Square Enix has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500. Comparatively, WEBTOON Entertainment has a beta of 2.57, suggesting that its share price is 157% more volatile than the S&P 500.
Valuation & Earnings
This table compares Square Enix and WEBTOON Entertainment”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Square Enix | $1.98 billion | 3.28 | $195.47 million | $0.75 | 24.01 |
| WEBTOON Entertainment | $1.38 billion | 0.90 | -$345.93 million | ($2.63) | -3.48 |
Square Enix has higher revenue and earnings than WEBTOON Entertainment. WEBTOON Entertainment is trading at a lower price-to-earnings ratio than Square Enix, indicating that it is currently the more affordable of the two stocks.
Summary
Square Enix beats WEBTOON Entertainment on 8 of the 13 factors compared between the two stocks.
About Square Enix
Square Enix Holdings Co., Ltd. operates in the content and service businesses in Japan and internationally. It operates through Digital Entertainment Business, Amusement Business, Publishing Business, and Rights Property Business. The company plans, develops, sells, and manages digital entertainment content primarily in the form of computer games. It is also involved in the operation of amusement facilities; and planning, development, manufacture, sale, and rental of arcade game machines and related products for amusement facilities. In addition, the company publishes and licenses comic books, magazines, game-related books, periodicals, etc. Further, it plans, produces, distributes, and licenses secondary works; and offers content under the SQUARE ENIX PRODUCTS brand; and stuffed toys and utility goods under the SQEX TOYS brand. The company was incorporated in 1975 and is headquartered in Tokyo, Japan.
About WEBTOON Entertainment
WEBTOON Entertainment Inc. operates a storytelling platform worldwide. The company’s platform allows a community of creators and users to discover, create, and share new content. Its platform offers stories primarily in two ways, including web-comics, a graphical comic-like medium; and web-novels, which are text-based stories. The company was founded in 2014 and is headquartered in Los Angeles, California. WEBTOON Entertainment Inc. is a subsidiary of NAVER Corporation.
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