Sparta Commercial Services (OTCMKTS:SRCO) vs. Paysign (NASDAQ:PAYS) Critical Review

Sparta Commercial Services (OTCMKTS:SRCO) and Paysign (NASDAQ:PAYS) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Valuation & Earnings

This table compares Sparta Commercial Services and Paysign’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sparta Commercial Services	$260,000.00	12.48	$1.02 million	N/A	N/A
Paysign	$47.27 million	5.15	$6.46 million	$0.12	38.33

Paysign has higher revenue and earnings than Sparta Commercial Services.

Analyst Ratings

This is a summary of current ratings and price targets for Sparta Commercial Services and Paysign, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sparta Commercial Services	0	0	0	0	N/A
Paysign	0	0	2	0	3.00

Paysign has a consensus target price of $5.50, suggesting a potential upside of 19.57%. Given Paysign’s higher possible upside, analysts clearly believe Paysign is more favorable than Sparta Commercial Services.

Insider & Institutional Ownership

25.9% of Paysign shares are held by institutional investors. 0.5% of Sparta Commercial Services shares are held by insiders. Comparatively, 23.3% of Paysign shares are held by 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.

Profitability

This table compares Sparta Commercial Services and Paysign’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sparta Commercial Services	-1,870.68%	N/A	-22,297.00%
Paysign	13.66%	34.33%	5.36%

Volatility and Risk

Sparta Commercial Services has a beta of -0.51, indicating that its share price is 151% less volatile than the S&P 500. Comparatively, Paysign has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Summary

Paysign beats Sparta Commercial Services on 10 of the 11 factors compared between the two stocks.

About Sparta Commercial Services

Sparta Commercial Services, Inc. develops, markets, and manages business websites and mobile applications for smartphones and tablets under the iMobileApp name. It offers mobile applications for vehicle dealerships, racetracks, private clubs, country clubs, schools and entertainment venues, restaurants, grocery stores, and various other merchant types. The company also owns and manages websites, which sell motorcycle, recreational vehicle, and truck title history reports for consumers, retailers, municipals, nonprofits, auction houses, banks, and insurance companies; and designs, launches, maintains, and hosts websites for businesses, as well as provides text messaging services. In addition, it offers eCommerce, customer relationship management development and integration, search engine optimization, social media marketing, and online reviews website services to its clients. Further, the company provides an equipment-leasing product for local and state agencies that helps to finance their essential equipment needs, including police motorcycles, cruisers, buses, fire trucks, and EMS equipment; and a range of hemp-derived cannabinol products through newworldhealthcbd.com. The company was incorporated in 1980 and is headquartered in New York, New York.

About Paysign

Paysign, Inc. provides prepaid card programs, comprehensive patient affordability offerings, digital banking services, and integrated payment processing services for businesses, consumers, and government institutions. Its product offerings include solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit accounts accessible with a debit card. The company markets its prepaid card solutions under the Paysign brand. Its primary market focus is on companies and municipalities that require a streamlined payment solution for rewards, rebates, payment assistance, and other payments to their customers, employees, agents, and others. The company was formerly known as 3PEA International, Inc. and changed its name to Paysign, Inc. in April 2019. Paysign, Inc. was incorporated in 1995 and is headquartered in Henderson, Nevada.