Contrasting i3 Verticals (NASDAQ:IIIV) and VirnetX (NYSE:VHC)

i3 Verticals (NASDAQ:IIIV) and VirnetX (NYSE:VHC) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Insider and Institutional Ownership

84.2% of i3 Verticals shares are owned by institutional investors. Comparatively, 10.4% of VirnetX shares are owned by institutional investors. 59.1% of i3 Verticals shares are owned by company insiders. Comparatively, 17.2% of VirnetX shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for i3 Verticals and VirnetX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
i3 Verticals	1	2	5	0	2.50
VirnetX	0	0	0	0	0.00

i3 Verticals presently has a consensus target price of $34.33, indicating a potential upside of 7.59%. Given i3 Verticals’ stronger consensus rating and higher possible upside, analysts clearly believe i3 Verticals is more favorable than VirnetX.

Risk & Volatility

i3 Verticals has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, VirnetX has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500.

Earnings & Valuation

This table compares i3 Verticals and VirnetX”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
i3 Verticals	$229.92 million	4.48	$113.34 million	$5.22	6.11
VirnetX	$50,000.00	1,816.03	-$18.17 million	($4.80)	-4.43

i3 Verticals has higher revenue and earnings than VirnetX. VirnetX is trading at a lower price-to-earnings ratio than i3 Verticals, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares i3 Verticals and VirnetX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
i3 Verticals	55.87%	3.87%	2.91%
VirnetX	N/A	-44.89%	-36.13%

Summary

i3 Verticals beats VirnetX on 12 of the 14 factors compared between the two stocks.

About i3 Verticals

i3 Verticals, Inc. provides integrated payment and software solutions primarily to the public sector and healthcare markets in the United States. It operates in two segments, Software and Services, and Merchant Services. The company offers payment processing services that enables upper and lower court case management, collections, finance and accounting, motor vehicle and carrier registration, e-filing and taxation, license plate inventory, property tax management, utility billing, professional licensing, document workflow, and law enforcement software; assists public schools in completing payment processing functions, including accepting payments for online or at school lunches, and school activities. It also provides software platforms, such as electronic healthcare records and revenue cycle management solutions; insurance adjudication, patient engagement platforms, billing, scheduling, and integrated payments solutions; and workflow software and associated professional services to medical insurance payers. In addition, the company engages in software licenses and subscriptions, transaction-based fees, ongoing software maintenance and support, and other software-related solutions; and payment processing and gateway fees, as well as other related fixed transaction or service fees. Further, it sells equipment, and offers non-software related professional services. The company offers its solutions to clients through direct sales force; distribution partners comprising independent software vendors, independent sales organizations, and value-added resellers. i3 Verticals, Inc. was founded in 2012 and is headquartered in Nashville, Tennessee.

About VirnetX

VirnetX Holding Corporation, through its subsidiary VirnetX, Inc., operates as an Internet security software and technology company primarily in the United States. The company develops software and technology solutions, including secure domain name registry and GABRIEL Connection Technology that are designed to secure communications over the Internet using zero trust network access. It also offers a portfolio of licenses and services, such as VirnetX One, a security-as-a-service platform that protects enterprise applications, services, and infrastructure from cyber-attacks; GABRIEL Connection Technology software development kit to assist with rapid integration of its techniques into existing software implementations; War Room software that offers safe and secure video conferencing meeting environment where sensitive communications and data is invisible to those not authorized to view it; and VirnetX Matrix that provides security for internet-enabled enterprise applications and their connected devices. In addition, the company provides GABRIEL Collaboration Suite that enables seamless and secure cross-platform communications between users’ devices. It serves domain infrastructure and communication service providers, and system integrators; and enterprise customers, developers, and original equipment manufacturers of chips, servers, desktops, smart phones, tablets, laptops, net books, and other devices in the IP-telephony, mobility, fixed-mobile convergence, and unified communications markets. The company has a partnership with ObjectSecurity LLC to provide secure cyber vulnerability analysis in private cloud environments. VirnetX Holding Corporation was incorporated in 2005 and is headquartered in Zephyr Cove, Nevada.