Analyzing Stars Group (TSG) & GDS (GDS)

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Stars Group (NASDAQ: GDS) and GDS (NASDAQ:GDS) are both mid-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

48.5% of Stars Group shares are owned by institutional investors. Comparatively, 31.3% of GDS shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Stars Group and GDS, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stars Group 0 1 1 0 2.50
GDS 0 0 4 1 3.20

Stars Group currently has a consensus price target of $41.00, suggesting a potential upside of 46.43%. GDS has a consensus price target of $40.82, suggesting a potential upside of 30.79%. Given Stars Group’s higher probable upside, research analysts clearly believe Stars Group is more favorable than GDS.

Valuation & Earnings

This table compares Stars Group and GDS’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stars Group $1.31 billion 4.65 $259.23 million $2.25 12.44
GDS $248.40 million 14.75 -$48.38 million ($0.51) -61.20

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

Profitability

This table compares Stars Group and GDS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stars Group 19.39% 24.66% 8.95%
GDS -20.08% -9.34% -3.07%

Volatility and Risk

Stars Group has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500. Comparatively, GDS has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Summary

Stars Group beats GDS on 10 of the 14 factors compared between the two stocks.

Stars Group Company Profile

The Stars Group Inc. provides technology-based products and services to gaming and interactive entertainment industries in Canada and internationally. It owns and operates gaming and related interactive entertainment businesses under the PokerStars, PokerStars Casino, BetStars, Full Tilt, the PokerStars Players No Limit Hold'em Championship, European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour, Asia Pacific Poker Tour, PokerStars Festival, and PokerStars MEGASTACK live poker tour and event brands, The company was formerly known as Amaya, Inc. and changed its name to The Stars Group Inc. in August 2017. The Stars Group Inc. was founded in 2004 and is headquartered in Toronto, Canada.

GDS Company Profile

GDS Holdings Limited, together with its subsidiaries, designs, builds, and operates data centers in the People's Republic of China. The company provides colocation, managed hosting, and managed cloud services. Its data centers service customers that primarily operate in the Internet and banking industries in Shanghai, Beijing, Shenzhen, Guangzhou, and Chengdu. The company serves Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. GDS Holdings Limited was incorporated in 2006 and is headquartered in Shanghai, the People's Republic of China.

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