Head-To-Head Contrast: Twilio (TWLO) versus Electronic Arts (EA)

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Twilio (NYSE:TWLO) and Electronic Arts (NASDAQ:EA) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Institutional and Insider Ownership

57.9% of Twilio shares are owned by institutional investors. Comparatively, 92.9% of Electronic Arts shares are owned by institutional investors. 19.8% of Twilio shares are owned by insiders. Comparatively, 2.2% of Electronic Arts shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Twilio and Electronic Arts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Twilio -18.29% -21.41% -13.66%
Electronic Arts 14.30% 25.31% 13.89%

Risk and Volatility

Twilio has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500. Comparatively, Electronic Arts has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Twilio and Electronic Arts, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Twilio 0 0 18 0 3.00
Electronic Arts 0 4 22 0 2.85

Twilio currently has a consensus target price of $78.18, indicating a potential upside of 4.24%. Electronic Arts has a consensus target price of $142.95, indicating a potential upside of 34.74%. Given Electronic Arts’ higher probable upside, analysts plainly believe Electronic Arts is more favorable than Twilio.

Earnings & Valuation

This table compares Twilio and Electronic Arts’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Twilio $399.02 million 18.32 -$63.70 million ($0.78) -96.15
Electronic Arts $5.15 billion 6.28 $1.04 billion $3.44 30.84

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

Summary

Electronic Arts beats Twilio on 11 of the 14 factors compared between the two stocks.

About Twilio

Twilio Inc. provides a cloud communications platform that enables developers to build, scale, and operate communications within software applications in the United States and internationally. The company's programmable communications cloud provides a set of application programming interfaces that enable developers to embed voice, messaging, and video capabilities into their applications. Twilio Inc. was founded in 2008 and is headquartered in San Francisco, California.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. The company develops and publishes games and services across various genres, such as sports, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, Mass Effect, Need for Speed, The Sims, and Plants v. Zombies brands; and license games from others, such as FIFA, Madden NFL, and Star Wars. It also provides advertisement services on its online Web pages and games; and licenses its game software to third parties. The company markets and sells its games and services through digital distribution channels, as well as through retail channels, such as mass market retailers, electronics specialty stores, and game software specialty stores. Electronic Arts Inc. was founded in 1982 and is headquartered in Redwood City, California.

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