Analyzing Pixelworks (NASDAQ:PXLW) & eGain (NASDAQ:EGAN)

eGain (NASDAQ:EGAN) and Pixelworks (NASDAQ:PXLW) are both small-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Risk and Volatility

eGain has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Pixelworks has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for eGain and Pixelworks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eGain	0	4	0	0	2.00
Pixelworks	1	0	2	0	2.33

eGain presently has a consensus price target of $6.50, suggesting a potential upside of 22.87%. Pixelworks has a consensus price target of $16.00, suggesting a potential upside of 140.60%. Given Pixelworks’ stronger consensus rating and higher possible upside, analysts clearly believe Pixelworks is more favorable than eGain.

Profitability

This table compares eGain and Pixelworks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
eGain	9.74%	11.75%	7.06%
Pixelworks	N/A	-28.77%	-14.64%

Institutional & Insider Ownership

53.9% of eGain shares are owned by institutional investors. Comparatively, 21.4% of Pixelworks shares are owned by institutional investors. 38.7% of eGain shares are owned by insiders. Comparatively, 4.7% of Pixelworks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares eGain and Pixelworks”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eGain	$91.14 million	1.52	$8.88 million	$0.32	16.53
Pixelworks	$690,000.00	58.31	-$22.50 million	($1.63)	-4.08

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

Summary

eGain beats Pixelworks on 9 of the 14 factors compared between the two stocks.

About eGain

eGain Corporation develops, licenses, implements, and supports customer service infrastructure software solutions in North America, Europe, the Middle East, Africa, and the Asia Pacific. It provides eGain Knowledge Hub, which helps businesses to centralize knowledge, policies, procedures, situational expertise, best-practices, while delivering guided, and personalized solutions to customers and agents; eGain Conversation Hub for digital-first, omnichannel interaction management within a modern, purpose-built desktop; and eGain Analytics Hub enables clients to measure, manage, and optimize omnichannel service operations and knowledge. The company also offers subscription services that provides customers with access to its software on a cloud-based platform; and professional services, such as consulting and implementation, training, and managed services. It serves customers in various industry sectors, including the financial services, telecommunications, retail, government, healthcare, and utilities. The company was incorporated in 1997 and is headquartered in Sunnyvale, California.

About Pixelworks

Pixelworks, Inc., together with its subsidiaries, develops and markets semiconductor and software solutions for mobile, home and enterprise, and cinema markets in the United States, Japan, China, Taiwan, Korea, and Europe. The company offers imageprocessor integrated circuits, such as embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing within high-end display systems; visual processor integrated circuits that works with a mobile application processor; and transcoder integrated circuits which includes software that control the operations and signal processing for converting multiple bitrates, resolutions and codecs to provide bandwidth efficient video transmissions based on industry standard protocols. It also provides software and platform licensing products comprising Pixelworks Pro Software, a software that enables development and customize the look and feel of mobile products by use of various features, such as absolute color accuracy, HDR tone mapping, SDR-to-HDR conversion, and others; and TrueCut Motion Platform, content creation tool which provides the ability to dial in a motion look on a shot-by-shot basis. The company distributes its products to integrators, branded manufacturers, and branded suppliers. Pixelworks, Inc. was founded in 1997 and is based in Portland, Oregon.