Benefitfocus (NASDAQ: BNFT) and Sapiens International Corporation N.V. (NASDAQ:SPNS) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Benefitfocus and Sapiens International Corporation N.V., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Benefitfocus 0 3 5 0 2.63
Sapiens International Corporation N.V. 0 0 4 0 3.00

Benefitfocus presently has a consensus target price of $35.00, suggesting a potential upside of 39.30%. Sapiens International Corporation N.V. has a consensus target price of $15.00, suggesting a potential upside of 7.30%. Given Benefitfocus’ higher probable upside, research analysts clearly believe Benefitfocus is more favorable than Sapiens International Corporation N.V..

Institutional & Insider Ownership

84.2% of Benefitfocus shares are held by institutional investors. Comparatively, 11.8% of Sapiens International Corporation N.V. shares are held by institutional investors. 40.1% of Benefitfocus shares are held by company insiders. Comparatively, 16.0% of Sapiens International Corporation N.V. shares are held by company 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.

Volatility and Risk

Benefitfocus has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Sapiens International Corporation N.V. has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Benefitfocus -10.28% N/A -14.40%
Sapiens International Corporation N.V. 1.39% 6.77% 4.41%

Earnings and Valuation

This table compares Benefitfocus and Sapiens International Corporation N.V.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Benefitfocus $233.34 million 3.37 -$40.05 million ($0.84) -29.91
Sapiens International Corporation N.V. $216.19 million 3.18 $19.33 million $0.07 199.74

Sapiens International Corporation N.V. has higher revenue, but lower earnings than Benefitfocus. Benefitfocus 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.

Summary

Sapiens International Corporation N.V. beats Benefitfocus on 7 of the 13 factors compared between the two stocks.

About Benefitfocus

Benefitfocus, Inc. (Benefitfocus) is a provider of cloud-based benefits management platform for consumers, employers, insurance carriers and brokers. The Benefitfocus Platform allows how organizations and individuals shop for, enroll in, manage and exchange benefits. The Company operates through two business segments: Employer, which derives its revenue from customers that use the Company’s services for the provision of benefits to their employees, and administrators acting on behalf of employers, Carrier, which derives its revenue from insurance companies that provide coverage at their own risk. Its solutions support benefits plans, including healthcare, dental, life and disability insurance, and voluntary benefits plans, such as critical illness, supplemental income and wellness programs. It provides a multi-tenant cloud-based benefits management platform to the employer and carrier markets.

About Sapiens International Corporation N.V.

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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