Critical Review: Research Solutions (NASDAQ:RSSS) versus Priority Technology (NASDAQ:PRTH)

Research Solutions (NASDAQ:RSSS) and Priority Technology (NASDAQ:PRTH) are both small-cap industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Institutional & Insider Ownership

33.6% of Research Solutions shares are held by institutional investors. Comparatively, 11.5% of Priority Technology shares are held by institutional investors. 26.5% of Research Solutions shares are held by insiders. Comparatively, 77.4% of Priority Technology shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Research Solutions and Priority Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Research Solutions	-1.05%	-4.96%	-1.63%
Priority Technology	-0.17%	N/A	-0.09%

Risk and Volatility

Research Solutions has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Priority Technology has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Research Solutions and Priority Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Research Solutions	0	0	2	0	3.00
Priority Technology	0	1	2	0	2.67

Research Solutions presently has a consensus price target of $4.68, suggesting a potential upside of 52.78%. Priority Technology has a consensus price target of $7.75, suggesting a potential upside of 147.60%. Given Priority Technology’s higher probable upside, analysts clearly believe Priority Technology is more favorable than Research Solutions.

Earnings and Valuation

This table compares Research Solutions and Priority Technology’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Research Solutions	$37.70 million	2.65	$570,000.00	($0.02)	-153.00
Priority Technology	$755.61 million	0.31	-$1.31 million	($0.63)	-4.97

Research Solutions has higher earnings, but lower revenue than Priority Technology. Research Solutions is trading at a lower price-to-earnings ratio than Priority Technology, indicating that it is currently the more affordable of the two stocks.

Summary

Priority Technology beats Research Solutions on 8 of the 13 factors compared between the two stocks.

About Research Solutions

Research Solutions, Inc., through its subsidiaries, provides cloud-based software-as-a-service research platform. The company is also involved in the transactional sale of published scientific, technical, and medical (STM) content managed, sourced, and delivered through the Transactions platform. Its solutions enable life science and other research intensive organizations to accelerate their research and development activities with access and management STM articles used throughout the intellectual property development lifecycle. The company was formerly known as Derycz Scientific, Inc. and changed its name to Research Solutions, Inc. in March 2013. Research Solutions, Inc. was incorporated in 2006 and is based in Henderson, Nevada.

About Priority Technology

Priority Technology Holdings, Inc. operates as a payment technology company in the United States. The company operates through three segments: Small and Medium-Sized Businesses (SMB) Payments, Business-To-Business (B2B) Payments, and Enterprise Payments. It offers SMB payments processing solutions for B2C transactions through independent sales organizations, financial institutions, independent software vendors, and other referral partners through its MX product suite, which includes MX Connect and MX Merchant products, such as MX Insights, MX Storefront, MX Retail, MX Invoice, MX B2B and ACH.com, and others, which provides flexible and customizable set of business applications that helps to manage critical business work functions and revenue performance to resellers and merchant clients using core payment processing. The company also offers CPX, a platform that offers accounts payable automation solutions, including virtual card, purchase card, ACH +, dynamic discounting, or check. In addition, it provides curated managed services; payment-adjacent technologies to facilitate the acceptance of electronic payments from customers; and Plastiq payables management software, which helps businesses in improving cash flow with instant access to working capital. Further, the company offers embedded finance and BaaS solutions to enterprise customers to modernize legacy platforms and accelerate software partners' strategies to monetize payments; and managed services solutions that provide audience-specific programs for institutional partners and other third parties; and consulting and development solutions. It serves SMB, and enterprises, as well as distribution partners, including retail and wholesale independent sales organizations, financial institutions, and independent software vendors. The company was founded in 2005 and is headquartered in Alpharetta, Georgia.