SPS Commerce (NASDAQ:SPSC) and SEA (NYSE:SE) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.
Profitability
This table compares SPS Commerce and SEA's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
SPS Commerce | 13.67% | 11.32% | 9.11% |
SEA | -38.59% | -144.79% | -22.93% |
Risk & Volatility
SPS Commerce has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, SEA has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.
Institutional and Insider Ownership
97.7% of SPS Commerce shares are held by institutional investors. Comparatively, 74.4% of SEA shares are held by institutional investors. 7.2% of SPS Commerce shares are held by insiders. Comparatively, 0.2% of SEA shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of recent recommendations for SPS Commerce and SEA, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
SPS Commerce | 0 | 1 | 3 | 0 | 2.75 |
SEA | 1 | 2 | 7 | 0 | 2.60 |
SPS Commerce currently has a consensus target price of $110.25, suggesting a potential upside of 12.42%. SEA has a consensus target price of $198.0909, suggesting a potential downside of 19.71%. Given SPS Commerce's stronger consensus rating and higher probable upside, equities analysts plainly believe SPS Commerce is more favorable than SEA.
Valuation and Earnings
This table compares SPS Commerce and SEA's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
SPS Commerce | $279.12 million | 12.63 | $33.71 million | $0.99 | 100.09 |
SEA | $2.18 billion | 38.90 | $-1,462,800,000.00 | ($2.27) | -113.98 |
SPS Commerce has higher earnings, but lower revenue than SEA. SEA is trading at a lower price-to-earnings ratio than SPS Commerce, indicating that it is currently the more affordable of the two stocks.
Summary
SPS Commerce beats SEA on 10 of the 14 factors compared between the two stocks.