Park City Group (NASDAQ: PCYG) and Gridsum Holding (NASDAQ:GSUM) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Profitability

This table compares Park City Group and Gridsum Holding’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Park City Group 19.34% 10.25% 8.26%
Gridsum Holding -26.87% -16.80% -10.15%

Valuation & Earnings

This table compares Park City Group and Gridsum Holding’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Park City Group $17.55 million 13.60 $4.08 million $0.13 94.62
Gridsum Holding $70.93 million 3.99 -$8.77 million ($0.90) -10.23

Park City Group has higher revenue, but lower earnings than Gridsum Holding. Gridsum Holding is trading at a lower price-to-earnings ratio than Park City Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

29.1% of Park City Group shares are owned by institutional investors. Comparatively, 30.5% of Gridsum Holding shares are owned by institutional investors. 37.5% of Park City Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Park City Group and Gridsum Holding, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Park City Group 0 0 3 0 3.00
Gridsum Holding 0 0 3 0 3.00

Park City Group currently has a consensus target price of $16.50, suggesting a potential upside of 34.15%. Gridsum Holding has a consensus target price of $20.87, suggesting a potential upside of 126.57%. Given Gridsum Holding’s higher probable upside, analysts plainly believe Gridsum Holding is more favorable than Park City Group.

Summary

Park City Group beats Gridsum Holding on 7 of the 10 factors compared between the two stocks.

Park City Group Company Profile

Park City Group, Inc. is a software-as-a-service (SaaS) provider. The Company delivers its services through software products designed, developed, marketed and supported by the Company. The Company also has a Professional Services business, which conducts customization, implementation and training. The Company has approximately two services groups, such as The Business Analytics Group and The Professional Services Group. The Business Analytics Group offers business-consulting services to suppliers and retailers in the grocery, convenience store and specialty retail industries. The Professional Services Group provides consulting services. The Company’s solutions include Advanced Commerce and Supply-Chain Solutions, and Food Safety Solutions. The Company’s primary advanced commerce and supply-chain solutions include Scan Based Trading, ScoreTracker, Vendor Managed Inventory, Store Level Replenishment, Enterprise Supply Chain Planning, Fresh Market Manager and ActionManager.

Gridsum Holding Company Profile

Gridsum Holding Inc. is a holding company. The Company provides data analysis software for multinational and domestic enterprises, and government agencies in China. The Company’s technology, the Gridsum Big Data Platform performs multi-dimensional correlation analysis and analyzes real-time events. The Company offers various types of solutions and technologies. The Company’s software products are designed for a range of commercial and governmental applications. The Company’s products focus on digital marketing analytics and automation solutions. The Company offers Web analytics solutions based on data warehouse technology to build solutions on a distributed data warehouse architecture, using the open-source Hadoop framework. The Company delivers its solutions as cloud-based software-as-a-service (SaaS) offerings that manage information technology (IT) support costs by outsourcing hardware and software maintenance and support.

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