Critical Contrast: Digimarc (DMRC) vs. PTC (PTC)

Digimarc (NASDAQ: DMRC) and PTC (NASDAQ:PTC) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for Digimarc and PTC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digimarc 0 1 3 0 2.75
PTC 1 4 12 0 2.65

Digimarc currently has a consensus target price of $45.33, suggesting a potential upside of 26.63%. PTC has a consensus target price of $66.13, suggesting a potential upside of 6.76%. Given Digimarc’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Digimarc is more favorable than PTC.

Institutional and Insider Ownership

53.4% of Digimarc shares are owned by institutional investors. Comparatively, 99.9% of PTC shares are owned by institutional investors. 7.5% of Digimarc shares are owned by company insiders. Comparatively, 1.0% of PTC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Digimarc and PTC’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digimarc $21.79 million 18.61 -$21.67 million ($2.25) -15.91
PTC $1.16 billion 6.18 $6.23 million $0.04 1,548.50

PTC has higher revenue and earnings than Digimarc. Digimarc is trading at a lower price-to-earnings ratio than PTC, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Digimarc and PTC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digimarc -90.69% -30.98% -29.02%
PTC 0.54% 8.08% 2.98%

Risk and Volatility

Digimarc has a beta of -1.19, suggesting that its share price is 219% less volatile than the S&P 500. Comparatively, PTC has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500.

Summary

PTC beats Digimarc on 10 of the 14 factors compared between the two stocks.

About Digimarc

Digimarc Corporation (Digimarc) enables governments and enterprises to give digital identities to media and objects that computers can sense and recognize. The Company’s Digimarc Discover, Digimarc Barcode and Intuitive Computing Platform are designed to optimize the identification of consumer brand impressions, facilitating mobile-centric shopping. The Company operates through media management solutions segment. The Company’s platform includes means to embed Digimarc Barcodes, invisible and inaudible barcode-like information that is recognizable by smartphones, industrial scanners, and other computer interfaces into various forms of media content, including consumer product packaging. Its Digimarc Barcodes has a range of applications, including facilitating scanning of products at retail checkout, as well as engagement with smartphone-equipped consumers. The Digimarc Barcode allows automatic identification of media without visible computer codes, such as traditional barcodes.

About PTC

PTC Inc. is a global computer software and services company. The Company offers a portfolio of computer-aided design (CAD) modeling, product lifecycle management (PLM) and service lifecycle management (SLM) solutions for manufacturers to create, operate, and service products. It offers a suite of Internet of Things (IoT) solutions that enables its customers to connect, manage and analyze data, and create applications. Its segments include the Solutions Group, the IoT Group and Professional Services. The Solutions Group segment includes its CAD, PLM and SLM products. The IoT Group segment includes its IoT, analytics and augmented reality (AR) solutions. The Professional Services segment includes consulting, implementation and training business. Its IoT products include ThingWorx, KEPServerEX, Vuforia Studio and Vuforia. Its CAD products include Creo and Mathcad. Its PLM products include Windchill, Integrity, Navigate and Creo View. Its SLM products include Servigistics and Arbortext.

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