Benefitfocus (NASDAQ: BNFT) and A10 Networks (NYSE:ATEN) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Analyst Recommendations

This is a summary of recent ratings and target prices for Benefitfocus and A10 Networks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Benefitfocus 0 2 7 0 2.78
A10 Networks 0 1 3 0 2.75

Benefitfocus presently has a consensus price target of $40.00, suggesting a potential upside of 26.78%. A10 Networks has a consensus price target of $9.75, suggesting a potential upside of 28.63%. Given A10 Networks’ higher possible upside, analysts clearly believe A10 Networks is more favorable than Benefitfocus.

Insider and Institutional Ownership

84.6% of Benefitfocus shares are held by institutional investors. Comparatively, 56.5% of A10 Networks shares are held by institutional investors. 40.1% of Benefitfocus shares are held by company insiders. Comparatively, 34.1% of A10 Networks shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Benefitfocus and A10 Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Benefitfocus -11.24% N/A -16.22%
A10 Networks -8.00% -20.33% -8.15%

Earnings & Valuation

This table compares Benefitfocus and A10 Networks’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Benefitfocus $248.19 million 3.96 -$6.36 million ($0.92) -34.29
A10 Networks $233.04 million 1.92 -$7.82 million ($0.28) -27.07

Benefitfocus has higher revenue and earnings than A10 Networks. Benefitfocus is trading at a lower price-to-earnings ratio than A10 Networks, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Benefitfocus has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, A10 Networks has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Summary

Benefitfocus beats A10 Networks on 9 of the 13 factors compared between the two stocks.

About Benefitfocus

Benefitfocus, Inc. (Benefitfocus) is a provider of cloud-based benefits management platform for consumers, employers, insurance carriers and brokers. The Benefitfocus Platform allows how organizations and individuals shop for, enroll in, manage and exchange benefits. The Company operates through two business segments: Employer, which derives its revenue from customers that use the Company’s services for the provision of benefits to their employees, and administrators acting on behalf of employers, Carrier, which derives its revenue from insurance companies that provide coverage at their own risk. Its solutions support benefits plans, including healthcare, dental, life and disability insurance, and voluntary benefits plans, such as critical illness, supplemental income and wellness programs. It provides a multi-tenant cloud-based benefits management platform to the employer and carrier markets.

About A10 Networks

A10 Networks, Inc. is a provider of software and hardware solutions. The Company’s solutions enable its customers to secure and optimize the performance of their data center and cloud applications, and secure their users, applications and infrastructure from Internet, Web and network threats at scale. The Company offers a portfolio of hardware, software and cloud offerings. Its customers include cloud providers, Web-scale companies, service providers, government organizations and enterprises. The Company’s portfolio consists of six application delivery and security products, including Application Delivery Controllers (ADC), Lightning Application Delivery Service (Lightning ADS), Carrier Grade Network Address Translation (CGN), Threat Protection System (TPS), SSL Insight (SSLi) and Convergent Firewall (CFW). The Company’s products are available in a range of form factors, such as optimized hardware appliances, bare metal software, virtual appliances and cloud-native software.

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