SPS Commerce (NASDAQ:SPSC) and Workiva (NYSE:WK) are both small-cap business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.
Risk & Volatility
SPS Commerce has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Workiva has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.
This table compares SPS Commerce and Workiva’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SPS Commerce||$248.24 million||6.63||$23.87 million||$0.61||77.34|
|Workiva||$244.34 million||7.55||-$50.07 million||($0.93)||-43.10|
SPS Commerce has higher revenue and earnings than Workiva. Workiva is trading at a lower price-to-earnings ratio than SPS Commerce, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for SPS Commerce and Workiva, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
SPS Commerce currently has a consensus price target of $60.42, indicating a potential upside of 28.06%. Workiva has a consensus price target of $53.50, indicating a potential upside of 33.48%. Given Workiva’s higher possible upside, analysts clearly believe Workiva is more favorable than SPS Commerce.
Insider and Institutional Ownership
49.4% of SPS Commerce shares are owned by institutional investors. Comparatively, 56.3% of Workiva shares are owned by institutional investors. 3.3% of SPS Commerce shares are owned by insiders. Comparatively, 18.5% of Workiva 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.
This table compares SPS Commerce and Workiva’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
SPS Commerce beats Workiva on 9 of the 14 factors compared between the two stocks.
About SPS Commerce
SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It offers solutions through the SPS Commerce platform, a cloud-based platform that enhances the way retailers, suppliers, grocers, distributors, and logistics firms manage and fulfill orders, administer sell-through performance, and source new items. The company offers Trading Partner Community solution, which enables retailers, grocers, and distributors to introduce changes to their supply chain requirements to their trading partner community, and onboard new vendors to receive their first orders; Trading Partner Fulfillment solution that provides fulfillment automation and replaces or augments an organization's existing staff and trading partner electronic communication infrastructure; and Trading Partner Assortment solution to manage individual attributes associated with each item a retailer or supplier sells. It also provides Trading Partner Analytics solution, which consists of data analytics applications that allow customers to enhance their visibility and analysis of their supply chains; Trading Partner Sourcing solutions that enables retailers to source providers of new items, suppliers to connect with new retailers, and retailing community; and Other Trading Partner Solutions, such as barcode labeling, planogram services, and scan and pack application that helps trading partners process information to streamline the picking and packaging process. The company sells its solutions through retailer, supplier, and logistic sales representatives to small- to mid-sized suppliers, as well as retailers, distributors, third-party logistics providers, and other trading partners. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.
Workiva Inc. provides cloud-based solutions for connected data, reporting, and compliance worldwide. The company offers Wdesk, a platform that provides data collection and linking, data integrations, controlled collaboration, granular permissions, process management, and full audit trail services; and Wdata, which includes data preparation tools, data connectors, and application programming interfaces that enable customers to create direct connections to their data. It serves public and private companies, government agencies, and higher-education institutions. The company was founded in 2008 and is headquartered in Ames, Iowa.
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