Liberty Tax (TAX) and PRGX Global (NASDAQ:PRGX) Critical Review
PRGX Global (NASDAQ: PRGX) and Liberty Tax (NASDAQ:TAX) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitabiliy, institutional ownership, earnings, risk, dividends and analyst recommendations.
Institutional and Insider Ownership
71.4% of PRGX Global shares are held by institutional investors. Comparatively, 45.3% of Liberty Tax shares are held by institutional investors. 15.0% of PRGX Global shares are held by insiders. Comparatively, 46.8% of Liberty Tax shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This is a summary of current ratings and price targets for PRGX Global and Liberty Tax, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PRGX Global presently has a consensus price target of $8.00, suggesting a potential upside of 28.00%. Given PRGX Global’s higher probable upside, equities analysts plainly believe PRGX Global is more favorable than Liberty Tax.
This table compares PRGX Global and Liberty Tax’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares PRGX Global and Liberty Tax’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|PRGX Global||$143.18 million||0.97||$9.14 million||($0.03)||-208.33|
|Liberty Tax||$173.99 million||1.11||$41.25 million||$0.83||16.75|
Liberty Tax has higher revenue and earnings than PRGX Global. PRGX Global is trading at a lower price-to-earnings ratio than Liberty Tax, indicating that it is currently the more affordable of the two stocks.
Liberty Tax pays an annual dividend of $0.64 per share and has a dividend yield of 4.6%. PRGX Global does not pay a dividend. Liberty Tax pays out 77.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility & Risk
PRGX Global has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Liberty Tax has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.
Liberty Tax beats PRGX Global on 9 of the 14 factors compared between the two stocks.
PRGX Global Company Profile
PRGX Global, Inc. (PRGX), together with its subsidiaries, provides recovery audit and spend analytics services. The Company provides recovery audit, procure-to-pay performance improvement, spend analytics and risk management services principally to large businesses and government agencies. The Company operates through three segments: Recovery Audit Services-Americas, Recovery Audit Services-Europe/Asia-Pacific and Adjacent Services. The Recovery Audit Services-Americas segment represents recovery audit services the Company provides in the United States, Canada and Latin America. The Recovery Audit Services-Europe/Asia-Pacific segment represents recovery audit services it provides in Europe, Asia and the Pacific region. The Adjacent Services segment includes spend analytics (data transformation and cost harmonization), Supplier Information Management (SIM) and Chartered Institute of Purchasing & Supply (CIPS) Sustainability Index (CSI).
Liberty Tax Company Profile
Liberty Tax, Inc. is the holding company for JTH Tax, Inc. The Company is a provider of tax preparation services. The Company provides retail federal and state income tax preparation services and related tax settlement products in the United States and Canada. The Company’s tax preparation services and related tax settlement products are offered primarily through franchised locations. All of the Company’s offices are operated under the Liberty Tax Service and SiempreTax+ brands. The Company also provides an online digital Do-It-Yourself (DIY) tax program in the United States. The Company offers two types of tax settlement financial products: refund transfer products, which include providing a means by which a customer receives his or her refund, and refund-based loans. The Company’s LibTax software allows tax customers to have their federal and state income tax returns filed electronically.
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