Model N (NYSE: MODN) and Bridgeline Digital (NASDAQ:BLIN) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Risk and Volatility

Model N has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, Bridgeline Digital has a beta of 0.03, indicating that its share price is 97% less volatile than the S&P 500.

Valuation & Earnings

This table compares Model N and Bridgeline Digital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Model N $124.07 million 3.41 -$29.98 million ($1.35) -10.78
Bridgeline Digital $15.78 million 0.79 -$832,000.00 ($1.35) -2.21

Bridgeline Digital has higher revenue, but lower earnings than Model N. Model N is trading at a lower price-to-earnings ratio than Bridgeline Digital, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

65.9% of Model N shares are held by institutional investors. Comparatively, 34.0% of Bridgeline Digital shares are held by institutional investors. 20.4% of Model N shares are held by insiders. Comparatively, 33.8% of Bridgeline Digital 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 Recommendations

This is a summary of recent recommendations for Model N and Bridgeline Digital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Model N 0 2 4 0 2.67
Bridgeline Digital 0 0 0 0 N/A

Model N presently has a consensus price target of $13.20, indicating a potential downside of 9.28%. Given Model N’s higher probable upside, equities research analysts plainly believe Model N is more favorable than Bridgeline Digital.

Profitability

This table compares Model N and Bridgeline Digital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Model N -30.85% -52.59% -20.77%
Bridgeline Digital -8.15% -13.97% -7.49%

Summary

Model N beats Bridgeline Digital on 6 of the 11 factors compared between the two stocks.

Model N Company Profile

Model N, Inc. is a provider of revenue management solutions for life science and technology companies. The Company’s solutions enable its customers to maximize revenues and reduce revenue compliance risk by transforming their revenue life cycle from a series of tactical, disjointed operations into a strategic end-to-end process. The Company’s solutions include Revenue Enterprise Cloud, Revenue Intelligence Cloud and Revvy Revenue Management. The Company provides solutions that span the organizational and operational boundaries of functions, such as sales, marketing and finance, and serve as a system of record for revenue management processes, including pricing, contracts, rebates, incentives and regulatory compliance. The Company’s application suites are designed to work with enterprise resource planning (ERP) and customer relationship management (CRM) applications. The Company also offers implementation services, managed services, strategic services and customer support.

Bridgeline Digital Company Profile

Bridgeline Digital, Inc. is a digital engagement company. The Company’s iAPPS platform is a Web Engagement Management (WEM) platform that integrates Web Content Management, e-commerce, e-marketing, Social Media management and Web Analytics to help marketers deliver digital experiences that engage and convert their customers across all channels. The iAPPS platform is delivered through a cloud-based Software as a Service (SaaS) multi-tenant business model, which provides customers with deployment providing maintenance, daily technical operation and support, or through a perpetual licensing business model. The iAPPS suite of products includes iAPPS Experience Manager, iAPPS Content Manager, iAPPS Commerce, iAPPS Marketier, iAPPS Analyzer, iAPPSds and iAPPS Social. It offers various services, such as digital engagement services, digital strategy services, usability design and information architecture. It provides shared hosting, dedicated hosting and SaaS hosting for its customers.

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