Critical Contrast: PFSweb (PFSW) & Cotiviti (COTV)

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PFSweb (NASDAQ:PFSW) and Cotiviti (NYSE:COTV) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Risk and Volatility

PFSweb has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Cotiviti has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Earnings & Valuation

This table compares PFSweb and Cotiviti’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PFSweb $326.83 million 0.40 -$3.96 million $0.20 34.25
Cotiviti $678.66 million 6.18 $138.20 million $1.42 31.51

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

Analyst Ratings

This is a summary of recent ratings and target prices for PFSweb and Cotiviti, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PFSweb 0 1 5 0 2.83
Cotiviti 0 11 0 0 2.00

PFSweb presently has a consensus price target of $10.25, indicating a potential upside of 49.64%. Cotiviti has a consensus price target of $35.08, indicating a potential downside of 21.58%. Given PFSweb’s stronger consensus rating and higher probable upside, analysts clearly believe PFSweb is more favorable than Cotiviti.

Profitability

This table compares PFSweb and Cotiviti’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PFSweb 0.65% 14.43% 3.50%
Cotiviti 21.49% 12.44% 6.65%

Institutional & Insider Ownership

63.3% of PFSweb shares are owned by institutional investors. Comparatively, 90.4% of Cotiviti shares are owned by institutional investors. 5.1% of PFSweb shares are owned by insiders. Comparatively, 7.5% of Cotiviti shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Cotiviti beats PFSweb on 9 of the 14 factors compared between the two stocks.

About PFSweb

PFSweb, Inc. provides omni-channel commerce solutions in the United States, Europe, Canada, and India. It operates through two segments, PFSweb, and Business and Retail Connect. The company offers strategic commerce consulting services, including commerce strategy, omni-channel consulting, digital opportunity audit, organizational/operational readiness, and platform evaluation/selection services; and strategy, design, and digital marketing services, such as digital strategy, design, user experience, interactive development, SEO and paid search, affiliate marketing, conversion optimization, storefront management, email marketing, and digital analytics. It also provides technology services comprising commerce platform development, managed, quality assurance, and training services; order fulfillment services, including distribution facilities and infrastructure, facility operations and management, and kitting and assembly services; and order management services, such as technology collaboration and information management services. In addition, the company offers customer care services comprising customer service application, customer assistance, quality monitoring, and customer self-help; and financial services consisting of business-to-business and direct-to-consumer financial management services. The company serves clients in various industries, such as fashion apparel and accessories, fragrance and beauty products, consumer packaged goods, home furnishings and housewares, coins and collectibles, and technology products. PFSweb, Inc. was founded in 1999 and is headquartered in Allen, Texas.

About Cotiviti

Cotiviti Holdings, Inc., through its subsidiaries, provides analytics-driven payment accuracy and spend management solutions primarily for the healthcare sector in the United States, Canada, the United Kingdom, and India. It operates through two segments, Healthcare, and Global Retail and Other. The company offers prospective claims accuracy solutions that enable healthcare clients identify and address claim discrepancies immediately following claim adjudication and before a claim is paid to a healthcare provider; and retrospective claims accuracy solutions that enable health insurers identify and resolve payment inaccuracies after a claim has been paid to a healthcare provider. It also provides analytics and support services, including anti-fraud, waste, and abuse analytics to identify abnormal patterns in coding and billing practices; surveillance and longitudinal analytics; and claims history analytics to identify areas for direct interaction, as well as to identify policy and program changes that can enhance future payment accuracy. The company was formerly known as Connolly Superholdings, Inc. and changed its name to Cotiviti Holdings, Inc. in September 2015. Cotiviti Holdings, Inc. was founded in 1979 and is headquartered in Atlanta, Georgia.

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