Comparing Charles River Associates (NASDAQ:CRAI) and Innodata (NASDAQ:INOD)

Innodata (NASDAQ:INOD) and Charles River Associates (NASDAQ:CRAI) are both small-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Insider and Institutional Ownership

30.7% of Innodata shares are held by institutional investors. Comparatively, 84.1% of Charles River Associates shares are held by institutional investors. 11.8% of Innodata shares are held by company insiders. Comparatively, 4.5% of Charles River Associates shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Innodata and Charles River Associates’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Innodata	14.66%	37.79%	20.92%
Charles River Associates	6.20%	27.31%	8.36%

Valuation and Earnings

This table compares Innodata and Charles River Associates”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innodata	$251.66 million	7.78	$32.18 million	$1.32	43.17
Charles River Associates	$751.58 million	1.39	$54.78 million	$7.51	22.15

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Innodata and Charles River Associates, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innodata	0	2	1	1	2.75
Charles River Associates	0	1	1	0	2.50

Innodata currently has a consensus target price of $130.00, indicating a potential upside of 128.15%. Charles River Associates has a consensus target price of $245.00, indicating a potential upside of 47.26%. Given Innodata’s stronger consensus rating and higher possible upside, research analysts clearly believe Innodata is more favorable than Charles River Associates.

Volatility and Risk

Innodata has a beta of 2.88, indicating that its stock price is 188% more volatile than the S&P 500. Comparatively, Charles River Associates has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500.

Summary

Innodata beats Charles River Associates on 10 of the 14 factors compared between the two stocks.

About Innodata

Innodata Inc. operates as a global data engineering company in the United States, the United Kingdom, the Netherlands, Canada, and internationally. The company operates through three segments: Digital Data Solutions (DDS), Synodex, and Agility. The DDS segment engages in the provision of artificial intelligence (AI) data preparation services; collecting or creating training data; annotating training data; and training AI algorithms for its customers, as well as AI model deployment and integration services. This segment also provides a range of data engineering support services, including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management. The Synodex segment offers an industry platform that transforms medical records into useable digital data with its proprietary data models or client data models. The Agility segment provides an industry platform that offers marketing communications and public relations professionals to target and distribute content to journalists and social media influencers; and to monitor and analyze global news channels, such as print, web, radio, and TV, as well as social media channels. It serves banking, insurance, financial services, technology, digital retailing, and information/media sectors through its professional staff, senior management, and direct sales personnel. The company was formerly known as Innodata Isogen, Inc. and changed its name to Innodata Inc. in June 2012. Innodata Inc. was incorporated in 1988 and is headquartered in Ridgefield Park, New Jersey.

About Charles River Associates

CRA International, Inc., together with its subsidiaries, provides economic, financial, and management consulting services worldwide. It advises clients on economic and financial matters pertaining to litigation and regulatory proceedings; and guides corporations through business strategy and performance-related issues. The company also offers consulting services, including research and analysis, expert testimony, and support in litigation and regulatory proceedings in the areas of finance, accounting, economics, insurance, and forensic accounting and investigations to corporate clients and attorneys. In addition, it offers management consulting services comprising strategy development, performance improvement, corporate strategy and portfolio analysis, estimation of market demand, environmental, social and corporate governance and sustainability strategy and analysis, design and implementation of auction and bidding, new product pricing strategies, survey and market research, valuation of intellectual property and other assets, assessment of competitors’ actions, and analysis of new sources of supply. The company serves various industries, including communications and media; consumer, health, and wellness products; energy; entertainment and leisure; financial services; healthcare; life sciences; manufacturing and industries; natural resources; retail and distribution; technology; and transportation. CRA International, Inc. was incorporated in 1965 and is headquartered in Boston, Massachusetts.