Financial Survey: Inovalon Holdings (INOV) versus CSRA (CSRA)

Inovalon Holdings (NASDAQ: INOV) and CSRA (NYSE:CSRA) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Volatility and Risk

Inovalon Holdings has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, CSRA has a beta of 1.95, suggesting that its share price is 95% more volatile than the S&P 500.

Profitability

This table compares Inovalon Holdings and CSRA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inovalon Holdings 4.13% 5.17% 3.38%
CSRA 6.36% 101.22% 6.76%

Dividends

CSRA pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Inovalon Holdings does not pay a dividend. CSRA pays out 20.9% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Inovalon Holdings and CSRA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inovalon Holdings 1 5 1 0 2.00
CSRA 1 2 6 0 2.56

Inovalon Holdings presently has a consensus price target of $14.00, suggesting a potential downside of 16.42%. CSRA has a consensus price target of $36.44, suggesting a potential upside of 13.92%. Given CSRA’s stronger consensus rating and higher possible upside, analysts clearly believe CSRA is more favorable than Inovalon Holdings.

Earnings and Valuation

This table compares Inovalon Holdings and CSRA’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Inovalon Holdings $419.99 million 5.82 $67.35 million $0.11 152.29
CSRA $4.97 billion 1.05 $954.80 million $1.91 16.75

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

Institutional & Insider Ownership

28.7% of Inovalon Holdings shares are owned by institutional investors. Comparatively, 92.7% of CSRA shares are owned by institutional investors. 48.3% of Inovalon Holdings shares are owned by insiders. Comparatively, 0.4% of CSRA 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.

Summary

CSRA beats Inovalon Holdings on 12 of the 16 factors compared between the two stocks.

About Inovalon Holdings

Inovalon Holdings, Inc. (Inovalon) is a technology company. The Company provides cloud-based platforms empowering a data-driven transformation from volume-based to value-based models to the healthcare industry. Leveraging large-scale data interconnectivity capabilities, unparalleled proprietary data sets, advanced analytics, data-driven intervention systems, and subject matter expertise, Inovalon enables the assessment and improvement of clinical and quality outcomes and financial performance across the healthcare ecosystem. The Company serves clients across the healthcare industry, which includes health plans and provider organizations, pharmaceutical, medical device, and diagnostics companies. It provides technology that supports approximately 500 healthcare organizations. Inovalon’s platforms are informed by data pertaining to more than 858,000 physicians, 377,000 clinical facilities, and more than 230 million Americans.

About CSRA

CSRA Inc. is a provider of information technology services to the United States federal government. The Company operates through two segments: Defense and Intelligence, and Civil. The Defense and Intelligence segment provides services to the Department of Defense (DoD), National Security Agency, branches of the Armed Forces, and other DoD and Intelligence agencies. The Civil segment provides services to various federal agencies within the Department of Homeland Security (the DHS), Department of Health and Human services, and other federal civil agencies, as well as various state and local government agencies. It supplies civil government agencies with mission information systems and associated technical support services. It provides its customers with technical services across service areas, including Digital Services, Enterprise Business Services, Digital Platforms, Cyber, Data Science, and Professional and Citizen Services. It has conducted operations in over 130 locations.

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