Critical Survey: ON24 (NYSE:ONTF) and eGain (NASDAQ:EGAN)

eGain (NASDAQ:EGAN) and ON24 (NYSE:ONTF) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares eGain and ON24’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
eGain	8.38%	12.28%	6.27%
ON24	-28.14%	-21.81%	-14.31%

Institutional & Insider Ownership

53.9% of eGain shares are held by institutional investors. Comparatively, 83.9% of ON24 shares are held by institutional investors. 34.3% of eGain shares are held by company insiders. Comparatively, 32.3% of ON24 shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares eGain and ON24″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eGain	$92.80 million	1.59	$7.78 million	$0.25	20.72
ON24	$163.71 million	1.55	-$51.79 million	($1.03)	-5.94

eGain has higher earnings, but lower revenue than ON24. ON24 is trading at a lower price-to-earnings ratio than eGain, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

eGain has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, ON24 has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for eGain and ON24, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eGain	0	1	1	0	2.50
ON24	0	3	0	0	2.00

eGain presently has a consensus price target of $9.50, suggesting a potential upside of 83.40%. ON24 has a consensus price target of $8.00, suggesting a potential upside of 30.72%. Given eGain’s stronger consensus rating and higher probable upside, equities analysts plainly believe eGain is more favorable than ON24.

Summary

eGain beats ON24 on 11 of the 14 factors compared between the two stocks.

About eGain

eGain Corporation develops, licenses, implements, and supports customer service infrastructure software solutions in North America, Europe, the Middle East, Africa, and the Asia Pacific. It provides eGain Knowledge Hub, which helps businesses to centralize knowledge, policies, procedures, situational expertise, best-practices, while delivering guided, and personalized solutions to customers and agents; eGain Conversation Hub for digital-first, omnichannel interaction management within a modern, purpose-built desktop; and eGain Analytics Hub enables clients to measure, manage, and optimize omnichannel service operations and knowledge. The company also offers subscription services that provides customers with access to its software on a cloud-based platform; and professional services, such as consulting and implementation, training, and managed services. It serves customers in various industry sectors, including the financial services, telecommunications, retail, government, healthcare, and utilities. The company was incorporated in 1997 and is headquartered in Sunnyvale, California.

About ON24

ON24, Inc. provides a cloud-based intelligent engagement platform that enables businesses to convert customer engagement into revenue through interactive webinar, virtual event, and multimedia content experiences worldwide. The company provides ON24 Elite, for live and interactive webinar experience; ON24 Breakouts, for live breakout room experience that facilitates networking, collaboration, and interactivity between users; ON24 Forums, for live and interactive experience, which facilitates video-to-video interaction between presenters and audiences; ON24 Go Live, for live and interactive video event experience that enables presenters and attendees to engage face-to-face in real-time; and ON24 Virtual Confrence, for live and large scale managed virtual event experience. It also offers ON24 Engagement Hub, for always-on multimedia content experience; ON24 Target, for personalized and curated landing page experience; ON24 Intelligence, for analytics backbone that captures first-person data to power the insights, benchmarking, reporting, and artificial intelligence and machine learning engine; ON24 AI-powered ACE, for enabling hyper-personalization at scale across ON24 experiences; ON24 Connect, for ecosystem of third-party application integrations; and ON24 Services and Platform Support, which provides a portfolio of professional services that provide consulting and support for product and platform adoption. In addition, the company offers consulting services, such as experience management, monitoring and production, implementation, and other support services. It sells its products through direct sales. The company serves technology, financial services, healthcare, industrial and manufacturing, professional services, and business-to-business information service companies. The company was formerly known as NewsDirect, Inc. and changed its name to ON24, Inc. in December 1998. ON24, Inc. was incorporated in 1998 and is headquartered in San Francisco, California.