Medidata Solutions (NASDAQ: MDSO) and ARI Network Services (NASDAQ:ARIS) are both technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, profitability, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

97.5% of Medidata Solutions shares are owned by institutional investors. Comparatively, 36.1% of ARI Network Services shares are owned by institutional investors. 5.8% of Medidata Solutions shares are owned by company insiders. Comparatively, 8.7% of ARI Network Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Medidata Solutions and ARI Network Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Medidata Solutions $508.77 million 8.72 $76.83 million $0.62 122.35
ARI Network Services $51.16 million 2.42 $6.53 million $0.14 50.68

Medidata Solutions has higher revenue and earnings than ARI Network Services. ARI Network Services is trading at a lower price-to-earnings ratio than Medidata Solutions, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Medidata Solutions has a beta of 1.81, indicating that its share price is 81% more volatile than the S&P 500. Comparatively, ARI Network Services has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Medidata Solutions and ARI Network Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medidata Solutions 0 1 9 0 2.90
ARI Network Services 1 1 0 0 1.50

Medidata Solutions presently has a consensus price target of $83.70, indicating a potential upside of 10.33%. Given Medidata Solutions’ stronger consensus rating and higher possible upside, research analysts plainly believe Medidata Solutions is more favorable than ARI Network Services.

Profitability

This table compares Medidata Solutions and ARI Network Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medidata Solutions 6.00% 7.75% 3.86%
ARI Network Services 11.55% 18.27% 9.56%

Summary

Medidata Solutions beats ARI Network Services on 10 of the 14 factors compared between the two stocks.

Medidata Solutions Company Profile

Medidata Solutions Inc. (Medidata) is a provider of cloud-based solutions for life sciences. The Company provides cloud-based solutions for clinical research in life sciences, offering platform technology that focuses on the clinical development. The Company’s plan study addresses three areas to ensure optimal study design, grant development and negotiation, and investigator payments. Study Design Optimization enables customers to gain visibility into the impact of protocol elements on resource and trial endpoints. Grants Manager compares specific industry benchmarks and analytics, using industry’s database of negotiated procedure costs, to support appropriate grants to investigator sites and automated negotiations with multiple investigator sites. Payments enables customers to establish a global investigator payment strategy and process to automate payment calculation, distribution and reporting, including tax and currency exchange calculations.

ARI Network Services Company Profile

ARI Network Services, Inc. (ARI) provides Website, software and data solutions. The Company’s solutions include Lead Generation and eCommerce Websites, eCatalogs, Business Management Software, Digital Marketing Services. It offers a menu of Website add-ons, including a mobile inventory management application, third-party inventory integrations and business management integrations. Its eCatalog solutions offer access to its library of electronic product content through a suite of software-as-a-service (SaaS) and data-as-a-service (DaaS) solutions. Its Business Management Software solutions are offered in the automotive tire and wheel aftermarket (ATW) aftermarket under the TCS Technologies, an ARI Company brand name. ARI’s Digital Marketing Services include search engine optimization, e-mail marketing, search engine marketing (PPC), online reputation management and online directory management. The Company’s other solutions include software, professional services and hosting services.

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