Digital River (DRIV) and ScanSource (SCSC) Critical Review
Digital River (NASDAQ: DRIV) and ScanSource (NASDAQ:SCSC) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.
Valuation & Earnings
This table compares Digital River and ScanSource’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ScanSource||$3.53 billion||0.27||$109.04 million||$2.48||15.12|
ScanSource has higher revenue and earnings than Digital River.
Insider & Institutional Ownership
94.7% of ScanSource shares are held by institutional investors. 3.0% of ScanSource shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Digital River and ScanSource’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent recommendations and price targets for Digital River and ScanSource, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ScanSource has a consensus price target of $45.25, suggesting a potential upside of 20.67%. Given ScanSource’s higher possible upside, analysts plainly believe ScanSource is more favorable than Digital River.
ScanSource beats Digital River on 7 of the 8 factors compared between the two stocks.
Digital River Company Profile
Digital River, Inc. (Digital River) is engaged in providing Commerce-as-a-Service solutions. The Company operates through a single segment, being providing solutions to companies that want to sell their products and services online. It provides commerce, payments and marketing solutions to business-to-business (B2B) and business-to-consumer (B2C) digital product and cloud service companies and manufacturers. The Company’s Commerce-as-a-Service suite includes commerce experience, tools and capabilities; Commerce Business Infrastructure (CBI); and marketing services. Its payments solutions offer customers a global payments footprint, including a range of domestic and international payment solutions, 180 global payment methods, 170 international currencies and 50 connections to local banks from across the globe. It provides a range of marketing services including paid search advertising, search engine optimization, affiliate marketing, store optimization and others.
ScanSource Company Profile
ScanSource, Inc. is a provider of technology products and solutions. The Company and its subsidiaries provide solutions for technology manufacturers and sell to resellers in technology markets, such as point-of-sale (POS) and Barcode, Networking and Security, Communications and Emerging Technologies. It operates through two segments: Worldwide Barcode & Security and Worldwide Communications & Services. The Barcode & Security distribution segment focuses on automatic identification and data capture (AIDC), POS, electronic physical security and three dimensional (3D) printing technologies. The Communications & Services distribution segment focuses on communications technologies and services. As of June 30, 2016, the Company marketed over 100,000 products from approximately 400 hardware and software vendors to approximately 35,000 reseller customers from distribution centers in Mississippi, Virginia, Florida, Mexico, Colombia, Brazil, Belgium, France, Germany and the United Kingdom.
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