Analyzing MicroAlgo (NASDAQ:MLGO) and Thoughtworks (NASDAQ:TWKS)

Thoughtworks (NASDAQ:TWKS) and MicroAlgo (NASDAQ:MLGO) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Risk & Volatility

Thoughtworks has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, MicroAlgo has a beta of 3.14, meaning that its stock price is 214% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Thoughtworks and MicroAlgo, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Thoughtworks	1	8	1	0	2.00
MicroAlgo	0	0	0	0	N/A

Thoughtworks currently has a consensus price target of $4.18, indicating a potential downside of 3.80%. Given Thoughtworks’ higher possible upside, analysts clearly believe Thoughtworks is more favorable than MicroAlgo.

Profitability

This table compares Thoughtworks and MicroAlgo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Thoughtworks	-11.20%	-5.81%	-3.42%
MicroAlgo	N/A	N/A	N/A

Insider and Institutional Ownership

32.8% of Thoughtworks shares are owned by institutional investors. Comparatively, 1.1% of MicroAlgo shares are owned by institutional investors. 2.3% of Thoughtworks shares are owned by insiders. Comparatively, 22.7% of MicroAlgo shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Thoughtworks and MicroAlgo’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Thoughtworks	$1.03 billion	1.36	-$68.66 million	($0.29)	-14.97
MicroAlgo	$81.89 million	0.03	-$37.87 million	N/A	N/A

MicroAlgo has lower revenue, but higher earnings than Thoughtworks.

Summary

MicroAlgo beats Thoughtworks on 6 of the 11 factors compared between the two stocks.

About Thoughtworks

Thoughtworks Holding, Inc. provides technology consultancy services in North America, the Asia Pacific, Europe, and Latin America. The company's consultancy services integrate strategy, design, and software engineering to enable enterprises and technology disruptors to thrive as modern digital businesses. It offers enterprise modernization, platforms, and cloud services, including modernization strategy and execution, digital platform strategy and engineering organization transformation, cloud modernization, cloud-native application support and evolution, and platform assessment and remediation; and customer experience, product, and design services comprising idea to market, customer experience strategy, product management transformation, and product design and delivery. The company also provides data and artificial intelligence services, such as data strategy, intelligent products, data platforms and data mesh, continuous delivery for machine learning, and data governance; digital transformation and operations services, which include delivery transformation, digital fluency, organization transformation, value-driven portfolio management, technology strategy, executive advisory, and digital foundations training; and DAMO managed services. It serves its clients in various industry verticals, including technology and business services; energy, public, and health services; retail and consumer; financial services and insurance; and automotive, travel, and transportation. The company was incorporated in 1993 and is headquartered in Chicago, Illinois.

About MicroAlgo

MicroAlgo Inc. develops and applies central processing algorithm solutions to customers in internet advertisement, gaming, and intelligent chip industries in the People’s Republic of China, Hong Kong, and internationally. The company operates through two segments, Central Processing Algorithm Services, and Intelligent Chips and Services. It offers services that includes algorithm optimization, accelerating computing power without the need for hardware upgrades, data processing, and data intelligence services. The company also provides advertising distribution, mobile game publishing and licensing, software services, and comprehensive solutions for enterprise customers, as well as intelligent chips solutions for the semiconductor sector. In addition, it engages in the resale of intelligent chips and accessories; and provision of software development. MicroAlgo Inc. is headquartered in Shenzhen, the People’s Republic of China. MicroAlgo Inc. is a subsidiary of WiMi Hologram Cloud Inc.