Ellie Mae (NASDAQ: ELLI) and Sapiens International Corporation N.V. (NASDAQ:SPNS) are both enterprise software companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares Ellie Mae and Sapiens International Corporation N.V.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ellie Mae 18.08% 10.74% 9.75%
Sapiens International Corporation N.V. 0.38% 6.89% 4.32%

Valuation and Earnings

This table compares Ellie Mae and Sapiens International Corporation N.V.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Ellie Mae N/A N/A N/A $1.51 57.55
Sapiens International Corporation N.V. $216.19 million 2.96 $19.33 million $0.02 650.83

Sapiens International Corporation N.V. has higher revenue and earnings than Ellie Mae. Ellie Mae is trading at a lower price-to-earnings ratio than Sapiens International Corporation N.V., indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

11.8% of Sapiens International Corporation N.V. shares are owned by institutional investors. 16.0% of Sapiens International Corporation N.V. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Ellie Mae and Sapiens International Corporation N.V., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ellie Mae 0 4 9 0 2.69
Sapiens International Corporation N.V. 0 0 4 0 3.00

Ellie Mae currently has a consensus target price of $113.10, suggesting a potential upside of 30.15%. Sapiens International Corporation N.V. has a consensus target price of $15.00, suggesting a potential upside of 15.30%. Given Ellie Mae’s higher possible upside, research analysts clearly believe Ellie Mae is more favorable than Sapiens International Corporation N.V..

Risk and Volatility

Ellie Mae has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500. Comparatively, Sapiens International Corporation N.V. has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Summary

Ellie Mae beats Sapiens International Corporation N.V. on 6 of the 11 factors compared between the two stocks.

Ellie Mae Company Profile

Ellie Mae, Inc. is a provider of on-demand software solutions and services for the residential mortgage industry in the United States. Banks, credit unions, mortgage lenders and mortgage brokers use the Company’s Encompass mortgage management solution to originate and fund mortgages. The Company’s Encompass software is an enterprise solution that handles functions involved in running the business of originating mortgages, including customer relationship management; loan processing; underwriting; preparation of application, disclosure and closing documents; funding and closing the loan for the borrower; compliance with regulatory and investor requirements, and overall enterprise management. It delivers Encompass software in an on-demand Software-as-a-Service (SaaS). It also hosts the Ellie Mae Network, an electronic platform that allows Encompass users to conduct electronic business transactions with investors and service providers they work with in order to process and fund loans.

Sapiens International Corporation N.V. Company Profile

Sapiens International Corporation N.V. (Sapiens) is a provider of software solutions for the insurance industry, with a focus on the financial services sector. The Company operates in provider of software solutions segment. Its software solutions portfolio consists of Life, Pension, Annuity and Retirement Solutions, including software solutions for the management of a range of products for life, pension, annuity and retirement; Property and Casualty/General Insurance Solutions, including a software suite of solutions, supporting a range of business lines, including personal, commercial and specialty lines, as well as a solution for the management of reinsurance contracts; Sapiens DECISION, which is a business decision management solution, and Technology-Based Solutions, such as Sapiens eMerge. Its services include project delivery and implementation, business and technical consulting related to its products, project and program management, training and user acceptance testing.

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