Critical Analysis: Performant Healthcare (NASDAQ:PHLT) and Cannlabs (OTCMKTS:CANL)

Performant Healthcare (NASDAQ:PHLT) and Cannlabs (OTCMKTS:CANL) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

77.2% of Performant Healthcare shares are held by institutional investors. 9.2% of Performant Healthcare shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Performant Healthcare and Cannlabs, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Performant Healthcare	0	4	1	0	2.20
Cannlabs	0	0	0	0	0.00

Performant Healthcare presently has a consensus target price of $7.8750, suggesting a potential upside of 3.35%. Given Performant Healthcare’s stronger consensus rating and higher probable upside, equities analysts plainly believe Performant Healthcare is more favorable than Cannlabs.

Profitability

This table compares Performant Healthcare and Cannlabs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Performant Healthcare	-4.62%	-6.68%	-4.96%
Cannlabs	N/A	N/A	N/A

Risk and Volatility

Performant Healthcare has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, Cannlabs has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500.

Earnings & Valuation

This table compares Performant Healthcare and Cannlabs”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Performant Healthcare	$122.98 million	4.85	-$9.90 million	($0.08)	-95.25
Cannlabs	N/A	N/A	N/A	N/A	N/A

Cannlabs has lower revenue, but higher earnings than Performant Healthcare.

Summary

Performant Healthcare beats Cannlabs on 6 of the 10 factors compared between the two stocks.

About Performant Healthcare

Performant Healthcare, Inc. engages in the provision of technology-enabled audit, recovery, customer care, and related analytics services. Its services help identify improper payments, and in some markets, restructure and recover delinquent or defaulted assets and improper payments for both government and private clients. The company was founded in 1976 and is headquartered in Plantation, FL.

About Cannlabs

CannLabs, Inc. provides cannabis testing laboratory services in the United States. Its testing services include potency testing, residual solvent analysis, microbiological testing, pesticide testing, heavy metals testing, nutrient analysis, terpenes analysis, shelf-life/stability studies, gene expression testing, and genotyping/phenotyping testing. The company also offers data/analytics and consulting, as well as education services. CannLabs, Inc. was incorporated in 2010 and is based in Denver, Colorado.