Critical Analysis: Gamehaus (NASDAQ:GMHS) and Melco Resorts & Entertainment (NASDAQ:MLCO)

Gamehaus (NASDAQ:GMHS) and Melco Resorts & Entertainment (NASDAQ:MLCO) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

This table compares Gamehaus and Melco Resorts & Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gamehaus	N/A	N/A	N/A
Melco Resorts & Entertainment	1.15%	-18.47%	2.24%

Valuation & Earnings

This table compares Gamehaus and Melco Resorts & Entertainment”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gamehaus	$118.05 million	0.47	$3.96 million	$0.03	34.50
Melco Resorts & Entertainment	$5.06 billion	0.72	$43.54 million	$0.26	33.56

Melco Resorts & Entertainment has higher revenue and earnings than Gamehaus. Melco Resorts & Entertainment is trading at a lower price-to-earnings ratio than Gamehaus, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for Gamehaus and Melco Resorts & Entertainment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gamehaus	0	0	0	0	0.00
Melco Resorts & Entertainment	2	2	5	0	2.33

Melco Resorts & Entertainment has a consensus price target of $8.40, indicating a potential downside of 3.72%. Given Melco Resorts & Entertainment’s stronger consensus rating and higher probable upside, analysts clearly believe Melco Resorts & Entertainment is more favorable than Gamehaus.

Institutional and Insider Ownership

63.7% of Gamehaus shares are held by institutional investors. Comparatively, 39.6% of Melco Resorts & Entertainment shares are held by institutional investors. 27.7% of Gamehaus shares are held by insiders. Comparatively, 57.1% of Melco Resorts & Entertainment shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Gamehaus has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500. Comparatively, Melco Resorts & Entertainment has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Summary

Melco Resorts & Entertainment beats Gamehaus on 12 of the 14 factors compared between the two stocks.

About Gamehaus

Gamehaus Holdings Inc. is a mobile game developer and publisher. Gamehaus Holdings Inc. is headquartered in Beijing, China.

About Melco Resorts & Entertainment

Melco Resorts & Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia. It owns and operates City of Dreams, an integrated casino resort that has 500 gaming tables and 800 gaming machines; approximately 1,400 hotel rooms and suites; a wet stage performance theater with approximately 2,000 seats; approximately 30 restaurants and bars, and 150 retail outlets; and recreation and leisure facilities, including health and fitness clubs, swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau, a casino hotel, which has approximately 112 gaming tables and 56 gaming machines; 230 hotel rooms; various fine dining and casual restaurants, and recreation and leisure facilities; and various non-gaming amenities comprising spa, gymnasium, outdoor garden podium, and sky terrace lounge. In addition, it operates Studio City, a cinematically-themed integrated entertainment, retail, and gaming resort that comprises 280 gaming tables and 980 gaming machines in Cotai, Macau. Further, the company owns and operates 7 Mocha Clubs with 1,034 gaming machines, as well as Taipa Square casino in Taipa Island, Macau. Additionally, it operates and manages City of Dreams Manila, a casino, hotel, retail, and entertainment integrated resort in the Entertainment City complex in Manila. The company was formerly known as Melco Crown Entertainment Limited and changed its name to Melco Resorts & Entertainment Limited in April 2017. Melco Resorts & Entertainment Limited was incorporated in 2004 and is based in Central, Hong Kong. As of February 16, 2017, Melco Resorts & Entertainment Limited operates as a subsidiary of Melco Leisure and Entertainment Group Limited.