GrubHub (NYSE:GRUB) and HMS (NASDAQ:HMSY) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Valuation and Earnings

This table compares GrubHub and HMS’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GrubHub $1.31 billion 4.88 -$18.57 million $0.16 435.75
HMS $626.40 million 4.44 $87.22 million $1.15 27.38

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

Institutional and Insider Ownership

95.8% of HMS shares are held by institutional investors. 1.9% of GrubHub shares are held by company insiders. Comparatively, 2.7% of HMS shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares GrubHub and HMS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GrubHub -4.36% -0.74% -0.46%
HMS 12.35% 11.47% 7.95%

Risk & Volatility

GrubHub has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, HMS has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for GrubHub and HMS, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GrubHub 3 23 2 0 1.96
HMS 0 1 7 0 2.88

GrubHub currently has a consensus price target of $54.36, suggesting a potential downside of 22.03%. HMS has a consensus price target of $37.75, suggesting a potential upside of 19.88%. Given HMS’s stronger consensus rating and higher probable upside, analysts plainly believe HMS is more favorable than GrubHub.

Summary

HMS beats GrubHub on 11 of the 14 factors compared between the two stocks.

GrubHub Company Profile

Grubhub Inc., together with its subsidiaries, provides an online and mobile platform for restaurant pick-up and delivery orders in the United States. The company connects approximately 105,000 local restaurants with diners with diners in various cities. It offers Grubhub, Seamless, and Eat24 mobile applications and mobile Websites; and operates Websites through grubhub.com, seamless.com, eat24.com, and menupages.com. The company also provides corporate program that offers employees with various food and ordering options, including options for individual meals, group ordering, and catering, as well as proprietary tools that consolidate various food ordering into a single online account. In addition, it offers Allmenus.com and MenuPages.com, which provide an aggregated database of approximately 440,000 menus from restaurants in 50 U.S. states; Grubhub for Restaurants, a responsive Web application that can be accessed from computers and mobile devices, as well as Grubhub-provided tablets; point of sale (POS) integration, which allows restaurants to manage Grubhub orders and update their menus directly from their existing POS system; and Website and mobile application design and hosting services for restaurants, as well as technology and fulfillment services, including order transmission and customer relationship management tools. The company was formerly known as GrubHub Seamless Inc. and changed its name to Grubhub Inc. in February 2014. Grubhub Inc. was founded in 1999 and is headquartered in Chicago, Illinois.

HMS Company Profile

HMS Holdings Corp., through its subsidiaries, provides cost containment solutions in the United States healthcare marketplace. The company offers coordination of benefits services to government and commercial healthcare payers to ensure that the correct party pays the claim; and population management solutions that provide risk-bearing organizations with intelligence across their member populations to identify risks, and enhance patient engagement and outcomes, as well as payment integrity, care management and consumer engagement, and analytical solutions. It serves state Medicaid programs, commercial health plans, federal government health agencies, government and private employers, children's health insurance program, and other healthcare payers, as well as a subcontractor. The company was founded in 1974 and is headquartered in Irving, Texas.

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