Head to Head Comparison: PC Connection (CNXN) vs. Digital River (DRIV)

PC Connection (NASDAQ: CNXN) and Digital River (NASDAQ:DRIV) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and target prices for PC Connection and Digital River, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PC Connection 0 0 1 0 3.00
Digital River 0 0 0 0 N/A

PC Connection currently has a consensus target price of $33.00, indicating a potential upside of 22.91%. Given PC Connection’s higher probable upside, research analysts plainly believe PC Connection is more favorable than Digital River.

Institutional & Insider Ownership

41.5% of PC Connection shares are owned by institutional investors. 57.3% of PC Connection shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares PC Connection and Digital River’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PC Connection 1.63% 11.00% 7.06%
Digital River 4.52% 4.51% 2.18%

Valuation and Earnings

This table compares PC Connection and Digital River’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PC Connection $2.86 billion 0.25 $90.07 million $1.77 15.17
Digital River N/A N/A N/A N/A N/A

PC Connection has higher revenue and earnings than Digital River.

Summary

PC Connection beats Digital River on 7 of the 8 factors compared between the two stocks.

PC Connection Company Profile

PC Connection, Inc. is a provider of a range of information technology (IT) solutions. The Company conducts its business operations through three business segments: small- to medium-sized businesses (SMB), Large Account and Public Sector. The Company enables customers to design, enable, manage and service their IT environments. The Company’s IT products include computer systems, software and peripheral equipment, networking communications, and other products and accessories that the Company purchases from manufacturers, distributors and other suppliers. The Company also offers services involving design, configuration and implementation of IT solutions. The Company markets its products and services through its Websites, including www.connection.com, www.connection.com/enterprise, www.connection.com/publicsector, and www.macconnection.com. It uses a combination of outbound telemarketing, including some on-site sales solicitation by business development managers.

Digital River Company Profile

Digital River, Inc. (Digital River) is engaged in providing Commerce-as-a-Service solutions. The Company operates through a single segment, being providing solutions to companies that want to sell their products and services online. It provides commerce, payments and marketing solutions to business-to-business (B2B) and business-to-consumer (B2C) digital product and cloud service companies and manufacturers. The Company’s Commerce-as-a-Service suite includes commerce experience, tools and capabilities; Commerce Business Infrastructure (CBI); and marketing services. Its payments solutions offer customers a global payments footprint, including a range of domestic and international payment solutions, 180 global payment methods, 170 international currencies and 50 connections to local banks from across the globe. It provides a range of marketing services including paid search advertising, search engine optimization, affiliate marketing, store optimization and others.

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