Merge Healthcare (NASDAQ: MRGE) and Bottomline Technologies (NASDAQ:EPAY) are both small-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Earnings & Valuation

This table compares Merge Healthcare and Bottomline Technologies’ gross 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
Bottomline Technologies $349.41 million 3.43 $30.12 million ($0.87) -36.79

Bottomline Technologies has higher revenue and earnings than Merge Healthcare.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merge Healthcare 0 0 0 0 N/A
Bottomline Technologies 0 1 4 0 2.80

Bottomline Technologies has a consensus price target of $32.00, suggesting a potential downside of 0.03%. Given Bottomline Technologies’ higher possible upside, analysts clearly believe Bottomline Technologies is more favorable than Merge Healthcare.

Institutional & Insider Ownership

89.7% of Bottomline Technologies shares are owned by institutional investors. 3.2% of Bottomline Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Merge Healthcare and Bottomline Technologies’ 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%
Bottomline Technologies -9.48% 4.35% 1.92%

Summary

Bottomline Technologies beats Merge Healthcare on 6 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 Bottomline Technologies

Bottomline Technologies (de), Inc. is engaged in providing a set of cloud-based business payment, digital banking, fraud prevention, payment and financial document solutions. The Company helps businesses pay and get paid. It offers hosted or Software as a Service (SaaS) solutions, as well as software designed to run on-site at the customer’s location. It operates through four segments: Payments and Transactional Documents, Hosted Solutions, Digital Banking and Other. The Payments and Transactional Documents segment is a supplier of software products that provide a range of financial business process management solutions, including making and collecting payments and generating and storing business documents. The Hosted Solutions segment provides customers with SaaS technology offerings. The Digital Banking segment provides solutions to banking and financial institution customers. The Other segment consists of its healthcare and cyber fraud and risk management operating segments.

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