Analyzing ChannelAdvisor (NYSE:ECOM) & PDF Solutions (NASDAQ:PDFS)

ChannelAdvisor (NYSE:ECOMGet Rating) and PDF Solutions (NASDAQ:PDFSGet Rating) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for ChannelAdvisor and PDF Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ChannelAdvisor 0 0 1 0 3.00
PDF Solutions 0 0 3 0 3.00

ChannelAdvisor currently has a consensus target price of $26.00, suggesting a potential upside of 73.22%. PDF Solutions has a consensus target price of $34.25, suggesting a potential upside of 46.37%. Given ChannelAdvisor’s higher possible upside, equities research analysts clearly believe ChannelAdvisor is more favorable than PDF Solutions.

Profitability

This table compares ChannelAdvisor and PDF Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ChannelAdvisor 28.15% 10.97% 8.20%
PDF Solutions -19.35% -8.61% -7.01%

Volatility & Risk

ChannelAdvisor has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, PDF Solutions has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Earnings & Valuation

This table compares ChannelAdvisor and PDF Solutions’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ChannelAdvisor $167.73 million 2.73 $47.22 million $1.50 10.01
PDF Solutions $111.06 million 7.94 -$21.49 million ($0.58) -40.34

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

Institutional and Insider Ownership

89.9% of ChannelAdvisor shares are owned by institutional investors. Comparatively, 69.9% of PDF Solutions shares are owned by institutional investors. 5.2% of ChannelAdvisor shares are owned by insiders. Comparatively, 11.5% of PDF Solutions shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

ChannelAdvisor beats PDF Solutions on 9 of the 13 factors compared between the two stocks.

About ChannelAdvisor (Get Rating)

ChannelAdvisor Corporation, together with its subsidiaries, provides software-as-a-service (SaaS) solutions in the United States and internationally. The company's SaaS is a cloud platform that helps brands and retailers to improve their e-commerce operations, expand to new channels, and grow sales. Its suite of solutions includes various platform modules, including Marketplaces module that connects customers to third-party marketplaces, and allows brands and distributors to manage purchase orders, shipment notifications, stock quantities, and invoices for multiple retail dropship partners; Digital Marketing module that creates, manages, and evaluates advertising using a variety of ad formats across multiple channels; Shoppable Media module that allows brands to provide web visitors to purchase using dynamic links to in-stock retail product pages or carts, or with information on where products can be purchased from local retail stores; and Brand Analytics module, which helps brands for e-commerce channels with actionable insights into how products are performing across thousands of retailer websites and marketplaces. Its customers include online businesses of brands and retailers, as well as advertising agencies that use its solutions on behalf of their clients. The company was incorporated in 2001 and is headquartered in Morrisville, North Carolina.

About PDF Solutions (Get Rating)

PDF Solutions, Inc. provides proprietary software and physical intellectual property products for integrated circuit designs, electrical measurement hardware tools, proven methodologies, and professional services in the United States, China, Japan, Taiwan, and internationally. The company offers Exensio software products, such as Manufacturing Analytics that stores collected data in a common environment with a consistent view for enabling product engineers to identify and analyze production yield, performance, reliability, and other issues; Process Control that provides failure detection and classification capabilities for monitoring, alarming, and controlling manufacturing tool sets; Test Operations that offers data collection and analysis capabilities; and Assembly Operations that provides device manufacturers with the capability to link assembly and packaging data, including fabrication and characterization data over the product life cycle. It also provides design-for-inspection (DFI) Systems, such as DFI on-chip instruments; eProbe non-contactless E-beam tool; and Characterization Vehicle (CV) system, which includes CV test chips and pdFasTest electrical testers, as well as Exensio characterization software, designed to analyze the measurements collected from DFI on-chip instruments using the eProbe tool. In addition, the company offers Cimetrix software products that enables equipment manufacturers to provide industry standard interfaces on their products; and software-as-a-service, software related services, and characterization services. It sells its technologies and services through direct sales force, service teams, and strategic alliances to integrated device manufacturers, fabless semiconductor companies, foundries, equipment manufacturers, electronics manufacturing suppliers, original device manufacturers, out-sourced semiconductor assembly and test, and system houses. The company was founded in 1991 and is headquartered in Santa Clara, California.

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