PFSweb (NASDAQ:PFSW) and PaySign (NASDAQ:PAYS) are both small-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, dividends, earnings, institutional ownership and valuation.
Insider & Institutional Ownership
57.0% of PFSweb shares are owned by institutional investors. Comparatively, 24.4% of PaySign shares are owned by institutional investors. 6.5% of PFSweb shares are owned by company insiders. Comparatively, 38.6% of PaySign 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.
Risk and Volatility
PFSweb has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, PaySign has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.
Profitability
This table compares PFSweb and PaySign’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PFSweb | 0.15% | 10.54% | 2.67% |
| PaySign | 13.90% | 66.14% | 14.94% |
Analyst Ratings
This is a breakdown of recent ratings for PFSweb and PaySign, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PFSweb | 0 | 1 | 3 | 0 | 2.75 |
| PaySign | 0 | 1 | 3 | 0 | 2.75 |
PFSweb currently has a consensus target price of $9.00, indicating a potential upside of 271.90%. PaySign has a consensus target price of $12.50, indicating a potential upside of 21.71%. Given PFSweb’s higher possible upside, research analysts clearly believe PFSweb is more favorable than PaySign.
Valuation & Earnings
This table compares PFSweb and PaySign’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PFSweb | $326.16 million | 0.14 | $1.23 million | N/A | N/A |
| PaySign | $23.42 million | 20.86 | $2.57 million | $0.09 | 114.11 |
PaySign has lower revenue, but higher earnings than PFSweb.
Summary
PaySign beats PFSweb on 8 of the 11 factors compared between the two stocks.
PFSweb Company Profile
PFSweb, Inc. provides omni-channel commerce solutions in the United States, Europe, Canada, and India. It operates through two segments, LiveArea Professional Services and PFS Operations. The company offers strategic commerce consulting services, including commerce strategy, omni-channel consulting, digital opportunity audit, organizational/operational readiness, and platform evaluation/selection services; and design and digital marketing services, such as design, user experience, interactive development, search engine optimization and paid search, affiliate marketing, conversion optimization, storefront management, email marketing, and digital analytics. It also provides technology services comprising commerce development, managed, quality assurance, and training services; and order to cash service, such as technology collaboration, information management services, payments, business-to-business financial management, and direct-to-consumer financial management. In addition, the company offers fulfillment services, including distribution facilities and infrastructure, facility operations and management, pop-up distribution centers, and kitting and assembly services; and customer care services comprising customer service application, customer assistance, quality monitoring, and customer self-help. It serves clients in various industries, such as fashion apparel and accessories, fragrance and beauty products, consumer packaged goods, home furnishings and housewares, coins and collectibles, and technology products. The company was founded in 1999 and is headquartered in Allen, Texas.
PaySign Company Profile
PaySign, Inc. provides prepaid card programs and processing services under the PaySign brand to corporations, government agencies, universities, and other organizations. The company offers various services, including transaction processing, cardholder enrollment, value loading, cardholder account management, reporting, and customer service through PaySign, a proprietary card-processing platform. It also develops prepaid card products for healthcare reimbursement payments, pharmaceutical assistance, donor compensation, corporate and incentive rewards, and expense reimbursement cards; and payroll or general purpose reloadable cards, as well as gift or incentive cards. In addition, the company offers Buy and Bill programs for patients to purchase directly from physician’s office or through an infusion center for physician administered therapies; payment solution for source plasma collection centers; and PaySign Premier, a demand deposit account debit card, as well as customer service center and PaySign Communications Suite services. Its principal target markets for processing services comprise prepaid card issuers, retail and private-label issuers, small third-party processors, and small and mid-size financial institutions in the United States and internationally. The company was formerly known as 3PEA International, Inc. and changed its name to PaySign, Inc. in April 2019. PaySign, Inc. was incorporated in 1995 and is based in Henderson, Nevada.
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