Bridgeline Digital (NASDAQ:BLIN – Get Free Report) and Rapid7 (NASDAQ:RPD – Get Free Report) are both small-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.
Profitability
This table compares Bridgeline Digital and Rapid7’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bridgeline Digital | -8.65% | -14.51% | -8.76% |
| Rapid7 | 2.35% | 27.89% | 2.66% |
Valuation and Earnings
This table compares Bridgeline Digital and Rapid7″s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bridgeline Digital | $15.38 million | 0.58 | -$2.52 million | ($0.12) | -5.86 |
| Rapid7 | $859.79 million | 1.15 | $23.38 million | $0.31 | 47.52 |
Rapid7 has higher revenue and earnings than Bridgeline Digital. Bridgeline Digital is trading at a lower price-to-earnings ratio than Rapid7, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
15.1% of Bridgeline Digital shares are owned by institutional investors. Comparatively, 95.7% of Rapid7 shares are owned by institutional investors. 27.5% of Bridgeline Digital shares are owned by insiders. Comparatively, 2.0% of Rapid7 shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Risk & Volatility
Bridgeline Digital has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Rapid7 has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings for Bridgeline Digital and Rapid7, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bridgeline Digital | 1 | 1 | 1 | 0 | 2.00 |
| Rapid7 | 5 | 17 | 1 | 0 | 1.83 |
Bridgeline Digital presently has a consensus target price of $4.62, suggesting a potential upside of 556.53%. Rapid7 has a consensus target price of $12.09, suggesting a potential downside of 17.94%. Given Bridgeline Digital’s stronger consensus rating and higher possible upside, analysts clearly believe Bridgeline Digital is more favorable than Rapid7.
Summary
Rapid7 beats Bridgeline Digital on 9 of the 12 factors compared between the two stocks.
About Bridgeline Digital
Bridgeline Digital, Inc. operates as a marketing technology company in the United States, Canada, and internationally. The company offers HawkSearch, a site search, recommendation, and personalization application for marketers, merchandisers, and developers; Celebros Search, a commerce-oriented site search product that provides natural language processing with artificial intelligence; and Woorank, a Search Engine Optimization (SEO) audit tool that generates an instant performance audit of the site's technical, on-page, and off-page SEO. It also provides Bridgeline TruPresence, a web content management and eCommerce platform to support the needs of multi-unit organizations and franchises; Bridgeline Unbound, a technology suite that empower marketers to easily manage their digital experiences and create personalized customer journeys; and OrchestraCMS, a digital experience platform that enables development of custom solutions, third-party integrations, and delivery of digital transformation initiatives on the Salesforce platform. In addition, the company offers digital engagement services comprising digital strategy, web design and web development, usability engineering, information architecture, and SEO, as well as hosting services. It serves vertical markets, such as industrial distributors and wholesalers, franchises and enterprises, manufacturers, eCommerce retailers, health services and life sciences, technology, credit unions and banks, and associations and foundations through its direct sales force. The company was formerly known as Bridgeline Software, Inc. Bridgeline Digital, Inc. was incorporated in 2000 and is based in Woburn, Massachusetts.
About Rapid7
Rapid7, Inc. provides cybersecurity solutions under the Rapid7, Nexpose, and Metasploit brand names. The company offers endpoint to cloud data collection and sharing applications, such as Rapid7 Insight Agent, a software-based agent that is used on assets across on-premises and cloud environments to centralize and monitor data on company's platform; Rapid7 Insight Network Sensor that analyzes raw end-to-end network traffic to increase visibility into user activity, pinpoint real threats, and investigations; Rapid7 Cloud Event Data Harvesting that offers visibility into changes made to cloud resources; and third-party integrations and ecosystem, as well as orchestration and automation solutions. It also offers various platforms, including Rapid7 managed threat complete consisting of managed detection response that delivers end-to-end threat detection and response, as well as offloads day-to-day vulnerability management operations. In addition, it provides Rapid7 threat complete consisting of InsightIDR, a security information and event management, and extended detection and response solution; and InsightVM, a vulnerability management solution that provides visibility across on-premise and remote endpoints for security teams to evaluate the business risks, and configurations, and share with their IT counterparts for remediation. Further, the company offers Rapid7 cloud risk complete, which includes InsightCloudSec, a cloud risk and compliance management solution; and InsightAppSec, a dynamic application security testing tool. It also provides professional services. It serves a range of industries, including business services, pharmaceuticals, technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, travel and transportation, government, online services, telecommunications, and professional services. The company was incorporated in 2000 and is headquartered in Boston, Massachusetts.
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