MINDBODY (MB) & Magic Software Enterprises (MGIC) Critical Comparison

MINDBODY (NASDAQ: MB) and Magic Software Enterprises (NASDAQ:MGIC) are both small-cap technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for MINDBODY and Magic Software Enterprises, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MINDBODY 0 1 9 0 2.90
Magic Software Enterprises 0 0 3 0 3.00

MINDBODY currently has a consensus price target of $33.05, indicating a potential downside of 5.30%. Magic Software Enterprises has a consensus price target of $10.17, indicating a potential upside of 12.65%. Given Magic Software Enterprises’ stronger consensus rating and higher probable upside, analysts plainly believe Magic Software Enterprises is more favorable than MINDBODY.

Insider & Institutional Ownership

90.3% of MINDBODY shares are owned by institutional investors. Comparatively, 9.5% of Magic Software Enterprises shares are owned by institutional investors. 8.2% of MINDBODY shares are owned by company insiders. Comparatively, 4.5% of Magic Software Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares MINDBODY and Magic Software Enterprises’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MINDBODY $139.02 million 11.72 -$22.97 million ($0.37) -94.32
Magic Software Enterprises $201.65 million 1.99 $11.90 million $0.26 34.71

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

Dividends

Magic Software Enterprises pays an annual dividend of $0.26 per share and has a dividend yield of 2.9%. MINDBODY does not pay a dividend. Magic Software Enterprises pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares MINDBODY and Magic Software Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MINDBODY -9.26% -8.39% -6.68%
Magic Software Enterprises 4.77% 10.37% 6.30%

Summary

Magic Software Enterprises beats MINDBODY on 10 of the 15 factors compared between the two stocks.

About MINDBODY

MINDBODY, Inc. is a provider of cloud-based business management software for the wellness services industry and operates as a consumer marketplace with local business subscribers on its platform. The Company’s subscribers provide a range of wellness services to active consumers. Its integrated software and payments platform helps business owners in the wellness services industry run, market and build their businesses. It also helps consumers discover, evaluate, engage and transact with these businesses through the Web and mobile devices. The platform addresses various aspects of operating a wellness business, including client scheduling and online booking; retail point-of-sale; analytics and reporting; user experience; mobility; social integration; dynamic cloud-based architecture; open platform for third-party application development; integration with other cloud-based partners, and security and compliance.

About Magic Software Enterprises

Magic Software Enterprises Ltd. is a provider of application development, business process integration platforms, vertical software solutions and related professional services. The Company is a vendor of information technology (IT) outsourcing services. Its software technology is used by customers to develop, deploy and integrate on premise, mobile and cloud-based business. It operates through two segments: software solutions and IT professional services. The software services segment includes software technology and complementary services. The IT professional services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, and communications services and solutions. Its product portfolio includes Magic xpa Application Platform, AppBuilder Application Platform and Magic xpi Integration Platform. Its vertical software packages include Leap, Hermes Solution, HR Pulse and MBS Solution.

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