Financial Review: PFSweb (NASDAQ:PFSW) vs. Gartner (IT)

PFSweb (NASDAQ: PFSW) and Gartner (NYSE:IT) are both business services companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Analyst Recommendations

This is a summary of current recommendations and price targets for PFSweb and Gartner, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PFSweb 0 0 4 0 3.00
Gartner 0 3 4 1 2.75

PFSweb currently has a consensus price target of $11.63, indicating a potential upside of 49.23%. Gartner has a consensus price target of $124.50, indicating a potential upside of 6.48%. Given PFSweb’s stronger consensus rating and higher probable upside, equities research analysts plainly believe PFSweb is more favorable than Gartner.

Insider and Institutional Ownership

68.9% of PFSweb shares are owned by institutional investors. Comparatively, 87.0% of Gartner shares are owned by institutional investors. 5.2% of PFSweb shares are owned by insiders. Comparatively, 4.4% of Gartner shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

PFSweb has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, Gartner has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Profitability

This table compares PFSweb and Gartner’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PFSweb -3.55% -1.66% -0.35%
Gartner 1.50% 103.10% 6.92%

Earnings and Valuation

This table compares PFSweb and Gartner’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PFSweb $280.52 million 0.52 $16.20 million ($0.65) -11.98
Gartner $2.75 billion 3.84 $373.34 million $0.55 212.58

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

Summary

Gartner beats PFSweb on 10 of the 13 factors compared between the two stocks.

About PFSweb

PFSWEB, Inc. is a global provider of omni-channel commerce solutions, including a range of technology, infrastructure and professional services. The Company’s service offerings include Website design, creation and integration, digital agency and marketing, e-commerce technologies, order management, customer care, logistics and fulfillment, financial management and professional consulting. It operates through two segments: PFSweb, and Business and Retail Connect. PFSweb is a global provider of various infrastructure, technology and digital agency solutions and operates as a service fee business. In the Business and Retail Connect segment, subsidiaries of the Company purchase inventory from clients and resell the inventory to client customers. Its solutions support direct-to-consumer (DTC), business-to-business (B2B) and retail sales channels. It markets its solutions as PFSweb’s End2End eCommerce solution.

About Gartner

Gartner, Inc. is an information technology research and advisory company. The Company works with clients to research, analyze and interpret the business of information technology (IT), supply chain and marketing within the context of their individual roles. It operates in three segments: Research, Consulting and Events. Research segment consists of subscription-based research products, access to research inquiry, peer networking services and membership programs. Consulting segment consists of consulting, measurement engagements and strategic advisory services. Events segment consists of various symposia, conferences and exhibitions. It provides insight through reports, briefings, tools, access to its analysts, peer networking services and membership programs that enable its clients to make decisions about their IT, supply chain and digital marketing initiatives. Its consultants provide fact-based consulting services to help clients use and manage IT to optimize business performance.

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