Critical Review: Marin Software (NASDAQ:MRIN) vs. Inovalon (NASDAQ:INOV)

Marin Software (NASDAQ:MRIN) and Inovalon (NASDAQ:INOV) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Institutional and Insider Ownership

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10.4% of Marin Software shares are held by institutional investors. Comparatively, 32.0% of Inovalon shares are held by institutional investors. 6.4% of Marin Software shares are held by insiders. Comparatively, 49.8% of Inovalon shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Marin Software and Inovalon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marin Software -42.77% -70.88% -30.60%
Inovalon 5.55% 11.72% 4.28%

Analyst Ratings

This is a summary of recent ratings for Marin Software and Inovalon, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marin Software 0 0 0 0 N/A
Inovalon 1 1 4 0 2.50

Inovalon has a consensus price target of $33.33, suggesting a potential downside of 10.44%. Given Inovalon’s higher probable upside, analysts clearly believe Inovalon is more favorable than Marin Software.

Volatility and Risk

Marin Software has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500. Comparatively, Inovalon has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Valuation and Earnings

This table compares Marin Software and Inovalon’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marin Software $29.98 million 2.67 -$14.05 million N/A N/A
Inovalon $667.52 million 8.72 $22.58 million $0.48 77.54

Inovalon has higher revenue and earnings than Marin Software.

Summary

Inovalon beats Marin Software on 12 of the 12 factors compared between the two stocks.

Marin Software Company Profile

Marin Software, Inc. is a cloud-based digital advertising management company. It provides cross-channel, cross-device, enterprise marketing software platform for search, social and display advertising channels, offered as a software-as-a-service. The firm’s integrated platform is an analytics, workflow and optimization solutions for marketing professionals, allowing them to manage their digital advertising spend across search and display advertising channels. The company was founded by Christopher A. Lien, Paul M. Butler, Joseph Chang and Wister Walcott in April 2006 and is headquartered in San Francisco, CA.

Inovalon Company Profile

Inovalon Holdings, Inc. engages in the development of cloud-based platforms for the healthcare industry. Its products include datasets, integration technologies, predictive analytics, and related services. The company was founded in 1998 and is headquartered in Bowie, MD.

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