Professional Diversity Network (NASDAQ: IPDN) and eGain Corporation (NASDAQ:EGAN) are both small-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitabiliy, earnings and institutional ownership.

Risk & Volatility

Professional Diversity Network has a beta of 3.01, meaning that its share price is 201% more volatile than the S&P 500. Comparatively, eGain Corporation has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Professional Diversity Network and eGain Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Professional Diversity Network 0 0 0 0 N/A
eGain Corporation 0 2 0 0 2.00

eGain Corporation has a consensus price target of $2.40, indicating a potential upside of 45.45%. Given eGain Corporation’s higher probable upside, analysts plainly believe eGain Corporation is more favorable than Professional Diversity Network.

Valuation and Earnings

This table compares Professional Diversity Network and eGain Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Professional Diversity Network $24.52 million 1.00 -$4.08 million ($2.02) -3.10
eGain Corporation $61.22 million 0.73 $418,000.00 ($0.17) -9.71

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

Profitability

This table compares Professional Diversity Network and eGain Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Professional Diversity Network -23.54% -23.86% -14.90%
eGain Corporation -7.51% N/A -14.40%

Insider & Institutional Ownership

4.7% of Professional Diversity Network shares are held by institutional investors. Comparatively, 48.9% of eGain Corporation shares are held by institutional investors. 19.0% of Professional Diversity Network shares are held by company insiders. Comparatively, 39.1% of eGain Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

eGain Corporation beats Professional Diversity Network on 9 of the 11 factors compared between the two stocks.

Professional Diversity Network Company Profile

Professional Diversity Network, Inc. is an operator of professional networks with a focus on diversity. The Company serves various communities, including Women, Hispanic-Americans, African-Americans, Asian-Americans, Disabled, Military Professionals, and Lesbian, Gay, Bisexual and Transgender (LGBT). The Company’s segments include Professional Diversity Network (PDN Network), which includes online professional networking communities with career resources for the needs of various diverse cultural groups; National Association of Professional Women (NAPW Network), a women-only professional networking organization, and Noble Voice operations (Noble Voice), a career consultation and lead generation service. The Noble Voice call centers qualify callers for real-time job placement. The PDN Network consists of various online professional networking communities dedicated to serving diverse professionals in the United States and employers seeking to hire diverse talent.

eGain Corporation Company Profile

eGain Corporation (eGain) provides cloud-based and on-site customer engagement software solutions. The Company optimizes service processes across the Web, social and phone channels. The Company’s solutions help business to consumer (B2C) businesses to operationalize digital customer engagement strategies. The Company is engaged in the development, license, implementation and support of customer service infrastructure software solutions. The Company offers eGain solution, which is designed for B2C businesses to do business with their customers. The Company offers eGain OpenCEH, which is an engagement hub platform. The eGain suite includes Mobile applications; Social applications; Web applications; Desktop applications; Management applications and analytics; Messaging applications; eGain OpenCEH, and eGain Connectors. It provides analytics capability to various contact centers for intra-day resource measurement and management, managing operational agility, and agent productivity.

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