Head to Head Contrast: eGain (NASDAQ:EGAN) versus SPS Commerce (NASDAQ:SPSC)

eGain (NASDAQ:EGAN) and SPS Commerce (NASDAQ:SPSC) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

53.9% of eGain shares are held by institutional investors. Comparatively, 99.0% of SPS Commerce shares are held by institutional investors. 38.7% of eGain shares are held by company insiders. Comparatively, 0.6% of SPS Commerce shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for eGain and SPS Commerce, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eGain	0	4	0	0	2.00
SPS Commerce	2	6	2	1	2.18

eGain currently has a consensus price target of $6.50, indicating a potential upside of 9.24%. SPS Commerce has a consensus price target of $77.10, indicating a potential downside of 8.43%. Given eGain’s higher possible upside, research analysts plainly believe eGain is more favorable than SPS Commerce.

Volatility & Risk

eGain has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, SPS Commerce has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.

Earnings & Valuation

This table compares eGain and SPS Commerce”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eGain	$91.14 million	1.71	$8.88 million	$0.32	18.59
SPS Commerce	$751.51 million	4.03	$93.34 million	$2.07	40.68

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
eGain	9.74%	11.75%	7.06%
SPS Commerce	10.10%	13.04%	10.83%

Summary

SPS Commerce beats eGain on 12 of the 15 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 SPS Commerce

SPS Commerce, Inc. provides cloud-based supply chain management solutions in the United States and internationally. It offers solutions through the SPS Commerce, a cloud-based platform that enhances the way retailers, grocers, suppliers, distributors, and logistics firms manage and fulfill omnichannel orders, optimize sell-through performance, and automate new trading relationships. The company also provides Fulfillment, an electronic data interchange solution that scales as a business grows, where companies use a single system to manage orders and logistics from various sales channels, including wholesale, eCommerce, and marketplaces; and Analytics product that enables organizations to enhance visibility into how products are selling through a single connection across various sales channels, including wholesale, eCommerce, and marketplaces, as well as enhances access and usage of sales and inventory data through a combination of analytics applications, network of connections, and industry-leading expertise. In addition, it offers various complimentary products, such as assortment product, which simplifies the communication of robust, accurate item data by automatically translating item attributes, and hierarchies; and community product that allows organizations to accelerate digitization of their supply chain and improve collaboration with suppliers through change management and onboarding programs. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.