Pixelworks (NASDAQ:PXLW) vs. eGain (NASDAQ:EGAN) Critical Survey

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eGain	$91.14 million	1.52	$8.88 million	$0.32	16.53
Pixelworks	$690,000.00	58.31	-$22.50 million	($1.63)	-4.08

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
eGain	9.74%	11.75%	7.06%
Pixelworks	N/A	-28.77%	-14.64%

Analyst Ratings

This is a breakdown of recent ratings and price targets for eGain and Pixelworks, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eGain	0	4	0	0	2.00
Pixelworks	1	0	2	0	2.33

eGain presently has a consensus target price of $6.50, indicating a potential upside of 22.87%. Pixelworks has a consensus target price of $16.00, indicating a potential upside of 140.60%. Given Pixelworks’ stronger consensus rating and higher probable upside, analysts plainly believe Pixelworks is more favorable than eGain.

Institutional and Insider Ownership

53.9% of eGain shares are held by institutional investors. Comparatively, 21.4% of Pixelworks shares are held by institutional investors. 38.7% of eGain shares are held by company insiders. Comparatively, 4.7% of Pixelworks shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

eGain has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Pixelworks has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Summary

eGain beats Pixelworks on 9 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 Pixelworks

Pixelworks, Inc., together with its subsidiaries, develops and markets semiconductor and software solutions for mobile, home and enterprise, and cinema markets in the United States, Japan, China, Taiwan, Korea, and Europe. The company offers imageprocessor integrated circuits, such as embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing within high-end display systems; visual processor integrated circuits that works with a mobile application processor; and transcoder integrated circuits which includes software that control the operations and signal processing for converting multiple bitrates, resolutions and codecs to provide bandwidth efficient video transmissions based on industry standard protocols. It also provides software and platform licensing products comprising Pixelworks Pro Software, a software that enables development and customize the look and feel of mobile products by use of various features, such as absolute color accuracy, HDR tone mapping, SDR-to-HDR conversion, and others; and TrueCut Motion Platform, content creation tool which provides the ability to dial in a motion look on a shot-by-shot basis. The company distributes its products to integrators, branded manufacturers, and branded suppliers. Pixelworks, Inc. was founded in 1997 and is based in Portland, Oregon.