Analyzing MultiPlan (NYSE:MPLN) & Liquidity Services (NASDAQ:LQDT)

Liquidity Services (NASDAQ:LQDT) and MultiPlan (NYSE:MPLN) are both small-cap business services companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Volatility & Risk

Liquidity Services has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500. Comparatively, MultiPlan has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Liquidity Services and MultiPlan, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Liquidity Services	0	0	2	0	3.00
MultiPlan	0	2	0	0	2.00

Liquidity Services presently has a consensus price target of $32.00, indicating a potential upside of 3.36%. MultiPlan has a consensus price target of $25.00, indicating a potential upside of 315.28%. Given MultiPlan’s higher probable upside, analysts plainly believe MultiPlan is more favorable than Liquidity Services.

Institutional and Insider Ownership

71.2% of Liquidity Services shares are owned by institutional investors. Comparatively, 87.2% of MultiPlan shares are owned by institutional investors. 29.8% of Liquidity Services shares are owned by insiders. Comparatively, 8.0% of MultiPlan shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Liquidity Services and MultiPlan’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Liquidity Services	5.91%	18.47%	10.23%
MultiPlan	-163.30%	-12.14%	-1.84%

Valuation and Earnings

This table compares Liquidity Services and MultiPlan”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Liquidity Services	$363.32 million	2.62	$20.98 million	$0.63	49.14
MultiPlan	$942.61 million	0.10	-$91.70 million	($95.05)	-0.06

Liquidity Services has higher earnings, but lower revenue than MultiPlan. MultiPlan is trading at a lower price-to-earnings ratio than Liquidity Services, indicating that it is currently the more affordable of the two stocks.

Summary

Liquidity Services beats MultiPlan on 11 of the 14 factors compared between the two stocks.

About Liquidity Services

Liquidity Services, Inc. provides e-commerce marketplaces, self-directed auction listing tools, and value-added services in the United States and internationally. The company operates through four segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio. Its marketplaces include liquidation.com that enable corporations to sell surplus and salvage consumer goods and retail capital assets; GovDeals marketplace, which provides self-directed service solutions in which sellers list their own assets that enables local and state government entities, and commercial businesses located in the United States and Canada to sell surplus and salvage assets; and AllSurplus, a centralized marketplace that connects global buyer base with assets from across the network of marketplaces in a single destination. The company also offers a suite of services, including surplus management, asset valuation, asset sales, marketing, returns management, asset recovery, and ecommerce services. In addition, it operates a global search engine platform for listing used equipment for sale in the construction, machine tool, transportation, printing, and agriculture sectors. The company offers products from industry verticals, such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet and transportation equipment, and specialty equipment. The company was incorporated in 1999 and is headquartered in Bethesda, Maryland.

About MultiPlan

MultiPlan Corporation, together with its subsidiaries, provides data analytics and technology-enabled cost management, payment, and revenue integrity solutions to the healthcare industry in the United States. The company offers analytics-based services that reduce medical costs, through data-driven algorithms and insights that detect claims over-charges and negotiate or recommend reimbursement; and network-based services that provide contracted discounts with healthcare providers, as well as outsourced network development and management services. It provides payment and revenue integrity services, such as identifying and removing improper and unnecessary charges paid during the claim, as well as services to identify and help restore and preserve underpaid premium dollars. In addition, the company offers data and decision science services including a suite of solutions that apply modern methods of data science to produce descriptive, predictive, and prescriptive analytics that drive optimized benefit plan design, support decision-making, improve clinical outcomes, and reduce the total cost of care; and business-to-business healthcare payments and other services. It serves national and regional insurance companies, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans, TPAs, self-insured health plans, property and casualty insurers, bill review companies, and other companies involved in the claim adjudication process. MultiPlan Corporation was founded in 1980 and is headquartered in New York, New York.