Critical Analysis: Inovalon (NASDAQ:INOV) versus Computer Services (NASDAQ:CSVI)

Inovalon (NASDAQ:INOV) and Computer Services (OTCMKTS:CSVI) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Inovalon and Computer Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inovalon 1 2 2 0 2.20
Computer Services 0 0 0 0 N/A

Inovalon currently has a consensus target price of $18.60, indicating a potential downside of 2.36%. Given Inovalon’s higher probable upside, research analysts plainly believe Inovalon is more favorable than Computer Services.

Risk & Volatility

Inovalon has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Computer Services has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500.

Earnings & Valuation

This table compares Inovalon and Computer Services’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inovalon $527.68 million 5.59 -$39.16 million $0.18 105.83
Computer Services $266.49 million 4.74 $44.96 million N/A N/A

Computer Services has lower revenue, but higher earnings than Inovalon.

Profitability

This table compares Inovalon and Computer Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inovalon -1.37% 7.11% 2.48%
Computer Services 17.28% 20.67% 14.81%

Insider & Institutional Ownership

33.8% of Inovalon shares are owned by institutional investors. Comparatively, 0.4% of Computer Services shares are owned by institutional investors. 50.4% of Inovalon shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Inovalon beats Computer Services on 8 of the 12 factors compared between the two stocks.

About Inovalon

Inovalon Holdings, Inc., a technology company, provides cloud-based platforms empowering data-driven healthcare. It operates the Inovalon ONE Platform, a cloud-based platform that interconnect with the healthcare ecosystem to aggregate and analyze data in real-time, as well as empowers the application in resulting insights. The company also operates myABILITY software platform, an integrated set of cloud-based applications for providers that offers connectivity, administrative, clinical and quality analysis, management, and performance improvement capabilities to acute, post-acute, and ambulatory point-of-care provider facilities. In addition, it offers advisory, implementation, and support services. The company serves health plans and provider organizations, as well as pharmaceutical, medical device, and diagnostics companies. Its platforms include information of data pertaining to approximately 964,000 physicians; 519,000 clinical facilities; and approximately 264 million individuals and 42 billion medical events. Inovalon Holdings, Inc. was founded in 1998 and is headquartered in Bowie, Maryland.

About Computer Services

Computer Services, Inc., together with its subsidiaries, delivers core processing, digital banking, managed services, payments processing, print and electronic distribution, and regulatory compliance solutions to financial institutions and corporate entities in the United States. It provides processing, maintenance, and support services; software licensing and installation services; professional services; and e-business services, as well as equipment and supply sales. The company also offers integrated banking solutions, which include mobile and Internet banking; check imaging; cash management; branch and merchant capture; print and mail, and online document delivery services; corporate intranets; secure Web hosting; e-messaging; teller and platform services; ATM and debit card service and support; payments solutions; risk assessment; network management; cloud-based managed services; and compliance software and services for regulatory compliance, homeland security, anti-money laundering, anti-terrorism financing, and fraud prevention. It provides its products and services to community banks, regional banks, and multi-bank holding companies, as well as to various other business enterprises. Computer Services, Inc. was incorporated in 1965 and is headquartered in Paducah, Kentucky.

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