ARI Network Services (NASDAQ: ARIS) and eGain Corporation (NASDAQ:EGAN) are both small-cap technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Insider & Institutional Ownership

36.1% of ARI Network Services shares are held by institutional investors. Comparatively, 47.8% of eGain Corporation shares are held by institutional investors. 8.7% of ARI Network Services shares are held by insiders. Comparatively, 39.0% of eGain Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

ARI Network Services has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500. Comparatively, eGain Corporation has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.

Valuation and Earnings

This table compares ARI Network Services and eGain Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ARI Network Services $51.16 million 2.42 $6.53 million $0.14 50.68
eGain Corporation $58.22 million 1.38 -$526,000.00 ($0.22) -13.41

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

Analyst Ratings

This is a summary of recent recommendations for ARI Network Services and eGain Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARI Network Services 1 1 0 0 1.50
eGain Corporation 0 2 1 0 2.33

eGain Corporation has a consensus target price of $2.93, indicating a potential downside of 0.56%. Given eGain Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe eGain Corporation is more favorable than ARI Network Services.

Profitability

This table compares ARI Network Services and eGain Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ARI Network Services 11.55% 18.27% 9.56%
eGain Corporation -10.34% N/A -14.94%

Summary

eGain Corporation beats ARI Network Services on 7 of the 13 factors compared between the two stocks.

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.

eGain Corporation Company Profile

eGain Corporation (eGain) provides cloud-based and on-site customer engagement software solutions. The Company optimizes service processes across the Web, social and phone channels. The Company’s solutions help business to consumer (B2C) businesses to operationalize digital customer engagement strategies. The Company is engaged in the development, license, implementation and support of customer service infrastructure software solutions. The Company offers eGain solution, which is designed for B2C businesses to do business with their customers. The Company offers eGain OpenCEH, which is an engagement hub platform. The eGain suite includes Mobile applications; Social applications; Web applications; Desktop applications; Management applications and analytics; Messaging applications; eGain OpenCEH, and eGain Connectors. It provides analytics capability to various contact centers for intra-day resource measurement and management, managing operational agility, and agent productivity.

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