Financial Analysis: CPS Technologies (NASDAQ:CPSH) versus ePlus (NASDAQ:PLUS)

CPS Technologies (NASDAQ:CPSH) and ePlus (NASDAQ:PLUS) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Analyst Recommendations

This is a summary of current recommendations for CPS Technologies and ePlus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CPS Technologies	1	1	1	0	2.00
ePlus	0	2	0	0	2.00

CPS Technologies presently has a consensus price target of $6.00, indicating a potential upside of 36.67%. Given CPS Technologies’ higher possible upside, analysts clearly believe CPS Technologies is more favorable than ePlus.

Institutional and Insider Ownership

11.2% of CPS Technologies shares are held by institutional investors. Comparatively, 93.8% of ePlus shares are held by institutional investors. 13.2% of CPS Technologies shares are held by insiders. Comparatively, 2.2% of ePlus shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

CPS Technologies has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500. Comparatively, ePlus has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.

Profitability

This table compares CPS Technologies and ePlus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CPS Technologies	-0.11%	-0.14%	-0.12%
ePlus	4.91%	11.51%	6.73%

Earnings & Valuation

This table compares CPS Technologies and ePlus”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CPS Technologies	$32.35 million	2.63	$420,000.00	($0.01)	-439.00
ePlus	$2.44 billion	0.93	$132.64 million	$4.57	19.12

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

Summary

ePlus beats CPS Technologies on 8 of the 13 factors compared between the two stocks.

About CPS Technologies

CPS Technologies Corporation provides advanced material solutions to the transportation, automotive, energy, computing/internet, telecommunication, aerospace, defense, and oil and gas markets in the United States, Europe, and Asia. The company offers metal matrix composites such as baseplates for various applications, including motor controllers used in electric trains, subway cars, wind turbines, and hybrid and electric vehicles; hermetic packages for use in radar, satellite, and avionics applications; baseplates and housings used in modules built with wide band gap semiconductors; and lids and heat spreaders for use in internet switches and routers. It also assembles housings and packages that includes metal matrix composite components for hybrid circuits; and produces armor for naval and military applications. The company sells its products to microelectronics systems companies. The company was formerly known as Ceramics Process Systems Corporation and changed its name to CPS Technologies Corporation in March 2007. CPS Technologies Corporation was incorporated in 1984 and is based in Norton, Massachusetts.

About ePlus

ePlus inc., together with its subsidiaries, provides information technology (IT) solutions that enable organizations to optimize their IT environment and supply chain processes in the United States and internationally. It operates through two segments, Technology and Financing. The Technology segment offers hardware, perpetual and subscription software, maintenance, software assurance, and internally provided and outsourced services; managed services or infrastructure and cloud; and enhanced maintenance support, service desk, storage-as-a-service, cloud hosted and managed, and managed security services; and professional, staff augmentation, cloud consulting, consulting, and security services. The Financing segment engages in financing arrangements, such as sales-type and operating leases; loans and consumption-based financing arrangements; and underwriting, management, and disposal of IT equipment and assets. Its financing operations comprise sales, pricing, credit, contracts, accounting, and risk and asset management. This segment primarily finances IT, communication-related, and medical equipment; and industrial machinery and equipment, office furniture and general office equipment, transportation equipment, and other general business equipment directly, as well as through vendors. The company serves commercial entities, state and local governments, government contractors, healthcare, and educational institutions. The company was formerly known as MLC Holdings, Inc. and changed its name to ePlus inc. in 1999. ePlus inc. was founded in 1990 and is headquartered in Herndon, Virginia.