USA Technologies (USAT) and ACI Worldwide (ACIW) Critical Comparison

USA Technologies (NASDAQ: USAT) and ACI Worldwide (NASDAQ:ACIW) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, profitabiliy, earnings, analyst recommendations, institutional ownership, dividends and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for USA Technologies and ACI Worldwide, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
USA Technologies 0 0 0 0 N/A
ACI Worldwide 0 1 3 0 2.75

ACI Worldwide has a consensus price target of $24.50, indicating a potential upside of 8.74%. Given ACI Worldwide’s higher probable upside, analysts clearly believe ACI Worldwide is more favorable than USA Technologies.

Risk & Volatility

USA Technologies has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500. Comparatively, ACI Worldwide has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.

Valuation & Earnings

This table compares USA Technologies and ACI Worldwide’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
USA Technologies $91.75 million 2.31 $3.89 million ($0.08) -65.63
ACI Worldwide $1.01 billion 2.63 $137.15 million $0.32 70.41

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

Institutional & Insider Ownership

44.4% of USA Technologies shares are held by institutional investors. Comparatively, 100.0% of ACI Worldwide shares are held by institutional investors. 4.4% of USA Technologies shares are held by insiders. Comparatively, 4.2% of ACI Worldwide shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares USA Technologies and ACI Worldwide’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
USA Technologies -3.23% -3.51% -2.39%
ACI Worldwide 3.80% 7.34% 2.92%

Summary

ACI Worldwide beats USA Technologies on 11 of the 12 factors compared between the two stocks.

USA Technologies Company Profile

USA Technologies, Inc. provides technology-enabled solutions and value-added services that facilitate electronic payment transactions within the unattended point of sale (POS) market. The Company is a provider in the small ticket, beverage and food vending industry and is also engaged in offering solutions and services to other unattended market segments, such as amusement, commercial laundry, kiosk and others. It has designed and marketed systems and solutions that facilitate electronic payment options, as well as telemetry and machine-to-machine (M2M) services, which include the ability to remotely monitor, control and report on the results of distributed assets containing its electronic payment solutions. The Company derives its revenues from license and transaction fees resulting from connections to, as well as services provided by, its ePort Connect service.

ACI Worldwide Company Profile

ACI Worldwide, Inc. develops, markets, installs and supports a line of software products and services primarily focused on facilitating electronic payments. The Company also distributes or acts as a sales agent for software developed by third parties. Its products and services are used principally by financial institutions, retailers, billers and electronic payment processors, both in domestic and international markets. The Company’s products are sold and supported through distribution networks covering three geographic regions, including the Americas, Europe/Middle East/Africa (EMEA) and Asia/Pacific. The Company’s products and services are used by a range of transaction-generating endpoints, including automated teller machines (ATM), retail merchant point-of-sale (POS) terminals, bank branches, corporations and Internet commerce sites. The Company provides payment solutions to financial institutions globally for both retail banking and transaction banking services.

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