Merge Healthcare (NASDAQ: MRGE) and Determine (NASDAQ:DTRM) are both small-cap technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitabiliy, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Merge Healthcare and Determine, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merge Healthcare 0 0 0 0 N/A
Determine 0 0 2 0 3.00

Determine has a consensus target price of $5.50, indicating a potential upside of 131.09%. Given Determine’s higher possible upside, analysts clearly believe Determine is more favorable than Merge Healthcare.

Profitability

This table compares Merge Healthcare and Determine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Merge Healthcare 3.02% 5.19% 1.77%
Determine -34.41% -106.24% -17.32%

Insider & Institutional Ownership

23.8% of Determine shares are held by institutional investors. 7.0% of Determine shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Merge Healthcare and Determine’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Merge Healthcare $28,560.00 N/A N/A N/A N/A
Determine $27.46 million 1.05 -$6.18 million ($0.81) -2.94

Merge Healthcare has higher revenue, but lower earnings than Determine.

Summary

Determine beats Merge Healthcare on 5 of the 8 factors compared between the two stocks.

About Merge Healthcare

Merge Healthcare Incorporated develops software solutions that facilitate the sharing of images. The Company operates through two segments: Merge Healthcare and Merge DNA. The Company’s Merge Healthcare segment markets, sells and implements interoperability, imaging and clinical solutions to healthcare providers. The Company’s Merge DNA (Data and Analytics) segment focuses on the marketing and sale of data capture software for clinical trials and related solutions. The Merge Healthcare segment offers licensing of software (including upgrades), the sale of hardware, professional services, maintenance and electronic data interchange (EDI) services. The Merge DNA segment offers on-premise licensing and hosting arrangements, and professional services.

About Determine

Determine, Inc., (Determine), formerly Selectica, Inc., is a provider of enterprise contract management, supply management and configuration solutions. The Company is engaged in providing software as a service (SaaS) Source to Pay and Enterprise Contract Lifecyclem Management (ECLM) solutions. Its Source to Pay software suite includes strategic sourcing, supplier management, contract management and procure-to-pay applications. The Determine Cloud Platform gives procurement, finance and legal professionals the ability to deliver insights through analysis of their supplier relationships and contractual requirements. The Determine platform is an open technology infrastructure based on smart process application models. In addition to its source to pay and enterprise contract lifecycle management solutions suite, Determine also provides a configuration engine solution. The Company’s Configuration engine consolidates the management and dissemination of complex product information.

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