Servicesource International (NASDAQ:SREV) and i3 Verticals (NASDAQ:IIIV) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.

Profitability

This table compares Servicesource International and i3 Verticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Servicesource International -8.06% -4.20% -2.21%
i3 Verticals -0.19% 14.70% 8.73%

Earnings and Valuation

This table compares Servicesource International and i3 Verticals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Servicesource International $238.34 million 0.36 -$24.89 million ($0.04) -22.75
i3 Verticals $323.51 million 2.32 -$6.89 million $0.56 50.91

i3 Verticals has higher revenue and earnings than Servicesource International. Servicesource International is trading at a lower price-to-earnings ratio than i3 Verticals, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for Servicesource International and i3 Verticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Servicesource International 0 2 0 0 2.00
i3 Verticals 0 0 4 0 3.00

Servicesource International presently has a consensus price target of $1.25, suggesting a potential upside of 37.36%. i3 Verticals has a consensus price target of $26.50, suggesting a potential downside of 7.05%. Given Servicesource International’s higher probable upside, equities analysts clearly believe Servicesource International is more favorable than i3 Verticals.

Institutional and Insider Ownership

68.4% of Servicesource International shares are owned by institutional investors. Comparatively, 33.0% of i3 Verticals shares are owned by institutional investors. 9.3% of Servicesource International shares are owned by company insiders. Comparatively, 56.2% of i3 Verticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

i3 Verticals beats Servicesource International on 11 of the 13 factors compared between the two stocks.

About Servicesource International

ServiceSource International, Inc. operates as a digital customer journey experience company. Its solutions include lead generation, inside sales, outsourced sales operations, customer onboarding, customer success management, cross-sell and upsell, warranty conversion, account-based marketing, and channel recruitment and enablement, as well as renewals management services, such as the sale of maintenance and support service contracts for the products used by its clients' end-users. The company also offers sales performance analysis, business case, pricing and contract structuring, data integration, data reservoir and performance optimization, client benchmarking and continuous improvement, and developing and delivering applications. In addition, its technologies comprise customer success management, renewal and channel management, inside sales, and productivity tools. The company sells its solutions through sales organization worldwide. ServiceSource International, Inc. was founded in 2002 and is headquartered in Denver, Colorado.

About i3 Verticals

i3 Verticals, Inc. provides integrated payment and software solutions to small- and medium-sized businesses and organizations in education, non-profit, public sector, property management, and healthcare markets in the United States. The company offers payment processing services, including merchant onboarding, risk and underwriting, authorization, settlement, chargeback processing, and other merchant support. Its payment processing services enable clients to accept electronic payments, facilitating the exchange of funds and transaction data between clients, financial institutions, and payment networks. The company also licenses software; and provides ongoing support, and other point of sale-related solutions. It offers its solutions to its clients through direct sales force, as well as through a network of distribution partners, including independent software vendors, value-added resellers, independent sales organizations, and other referral partners, such as financial institutions. The company was founded in 2012 and is headquartered in Nashville, Tennessee.

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