PFSweb (NASDAQ: PFSW) and Echelon Corporation (NASDAQ:ELON) are both small-cap business services companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitabiliy.

Insider and Institutional Ownership

68.9% of PFSweb shares are held by institutional investors. Comparatively, 19.4% of Echelon Corporation shares are held by institutional investors. 5.1% of PFSweb shares are held by company insiders. Comparatively, 9.1% of Echelon Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for PFSweb and Echelon Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PFSweb 0 0 5 0 3.00
Echelon Corporation 0 0 0 0 N/A

PFSweb presently has a consensus target price of $13.50, indicating a potential upside of 75.10%. Given PFSweb’s higher probable upside, equities analysts plainly believe PFSweb is more favorable than Echelon Corporation.

Risk and Volatility

PFSweb has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Echelon Corporation has a beta of -0.54, meaning that its stock price is 154% less volatile than the S&P 500.

Profitability

This table compares PFSweb and Echelon Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PFSweb -3.55% -1.66% -0.35%
Echelon Corporation -16.22% -19.36% -14.63%

Earnings & Valuation

This table compares PFSweb and Echelon Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PFSweb $280.52 million 0.52 $16.20 million ($0.65) -11.86
Echelon Corporation $31.54 million 0.71 -$4.46 million ($1.15) -4.38

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

Summary

PFSweb beats Echelon Corporation on 10 of the 12 factors compared between the two stocks.

About PFSweb

PFSWEB, Inc. is a global provider of omni-channel commerce solutions, including a range of technology, infrastructure and professional services. The Company’s service offerings include Website design, creation and integration, digital agency and marketing, e-commerce technologies, order management, customer care, logistics and fulfillment, financial management and professional consulting. It operates through two segments: PFSweb, and Business and Retail Connect. PFSweb is a global provider of various infrastructure, technology and digital agency solutions and operates as a service fee business. In the Business and Retail Connect segment, subsidiaries of the Company purchase inventory from clients and resell the inventory to client customers. Its solutions support direct-to-consumer (DTC), business-to-business (B2B) and retail sales channels. It markets its solutions as PFSweb’s End2End eCommerce solution.

About Echelon Corporation

Echelon Corporation develops open-standard control networking platforms and delivers elements necessary to design, install, monitor and control communities of devices. The Company’s products enable everyday devices, such as air conditioners, outdoor lighting, appliances, electricity meters, light switches, thermostats and valves to be inter-connected and be part of the Industrial Internet of Things (IIoT) market. It operates through the IIoT segment. Its IIoT business sells products and services that form embedded control platforms, such as LONWORKS and IzoT. The Company’s IIoT business also sells products and services, which include components, control nodes and development software. The Company also offers a solution consisting of outdoor lighting controllers, segment controllers, gateways and software to end customers, such as municipalities, cities, campuses and commercial enterprises. The Company markets its products under the Echelon brand.

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