Geeknet (NASDAQ: GKNT) and Points International (NASDAQ:PCOM) are both small-cap e-commerce & auction services companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Geeknet and Points International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Geeknet 0 0 0 0 N/A
Points International 0 0 2 0 3.00

Points International has a consensus target price of $13.50, suggesting a potential upside of 30.81%. Given Points International’s higher probable upside, analysts clearly believe Points International is more favorable than Geeknet.

Institutional & Insider Ownership

37.4% of Points International shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Geeknet and Points International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Geeknet -20.58% -25.85% -19.84%
Points International -0.43% 8.28% 3.47%

Volatility & Risk

Geeknet has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500. Comparatively, Points International has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Earnings & Valuation

This table compares Geeknet and Points International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Geeknet N/A N/A N/A ($1.48) -13.50
Points International $321.82 million 0.47 -$1.51 million ($0.09) -114.67

Geeknet has higher earnings, but lower revenue than Points International. Points International is trading at a lower price-to-earnings ratio than Geeknet, indicating that it is currently the more affordable of the two stocks.

Summary

Points International beats Geeknet on 9 of the 9 factors compared between the two stocks.

About Geeknet

Geeknet, Inc. (Geeknet) sells collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers through the ThinkGeek Website and exclusive products to the Company’s wholesale channel customers. The Company has three segments: Website, Wholesale and ThinkGeek Solutions. The ThinkGeek Solutions segment has been aggregated into the Website segment. The Website segment sells geek-themed retail products and video game-themed merchandise through the ThinkGeek Website and through the ThinkGeek Solutions Web-stores. The Wholesale segment sells primarily exclusive GeekLabs (the in-house product development team) products to brick-and-mortar retailers. The Company along with its subsidiaries, operates a business aimed at the global geek community, which includes technology enthusiasts, pop-culture aficionados and other fans. ThinkGeek, Inc. and ThinkGeek Solutions, Inc. are its two wholly owned subsidiaries.

About Points International

Points International Ltd. (Points) provides a range of e-commerce and technology services to loyalty program operators using a common infrastructure. These services include a range of white label or private branded e-commerce services (Loyalty Currency Services) that enable the sale of loyalty currencies (such as frequent flyer miles, hotel points and credit card points), both retail and wholesale, and support the loyalty program consumer offerings and their back end operations. The Company offers the consumer-focused Points Loyalty Wallet that allows users to track, manage and access multiple loyalty rewards programs through the Points.com Website. It also offers Points Travel, which is private label travel e-commerce platform designed specifically for the loyalty industry. The Company operates the PointsHound.com Website, a hotel booking engine and loyalty currency aggregator built specifically for frequent travelers.

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