Castlight Health, inc. (NYSE: CSLT) and Simulations Plus (NASDAQ:SLP) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitabiliy.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Castlight Health, inc. and Simulations Plus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Castlight Health, inc. 1 5 2 0 2.13
Simulations Plus 0 0 0 0 N/A

Castlight Health, inc. currently has a consensus target price of $4.54, suggesting a potential upside of 5.48%. Given Castlight Health, inc.’s higher probable upside, equities analysts clearly believe Castlight Health, inc. is more favorable than Simulations Plus.

Valuation and Earnings

This table compares Castlight Health, inc. and Simulations Plus’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Castlight Health, inc. $115.24 million 4.87 -$48.34 million ($0.45) -9.56
Simulations Plus $21.83 million 11.53 $9.15 million $0.32 45.63

Simulations Plus has higher revenue, but lower earnings than Castlight Health, inc.. Castlight Health, inc. is trading at a lower price-to-earnings ratio than Simulations Plus, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Castlight Health, inc. and Simulations Plus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Castlight Health, inc. -42.54% -44.33% -28.70%
Simulations Plus 24.86% 23.21% 19.23%

Dividends

Simulations Plus pays an annual dividend of $0.20 per share and has a dividend yield of 1.4%. Castlight Health, inc. does not pay a dividend. Simulations Plus pays out 62.5% of its earnings in the form of a dividend.

Risk & Volatility

Castlight Health, inc. has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, Simulations Plus has a beta of -0.71, suggesting that its stock price is 171% less volatile than the S&P 500.

Institutional and Insider Ownership

39.1% of Castlight Health, inc. shares are held by institutional investors. Comparatively, 29.2% of Simulations Plus shares are held by institutional investors. 37.4% of Castlight Health, inc. shares are held by insiders. Comparatively, 36.9% of Simulations Plus shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Castlight Health, inc. Company Profile

Castlight Health, Inc. offers a health benefits platform that engages employees to make healthcare decisions, and enables employers to communicate and measure their benefit programs. The Company operates through cloud-based products segment. Its technology offering aggregates data and applies analytics to make healthcare data transparent. Its products deliver employee engagement and enable employers to integrate benefit programs into a single platform available to employees and their families. Its health benefits platform engages external data and its substantial user base to provide a single, end-to-end solution that engages employees through personalized and relevant communications. Its offering provides employers the opportunity to communicate, measure, and get value out of their benefits and programs on a real-time basis. It offers cross-sell products, such as Castlight Action, Castlight Pharmacy, Castlight Dental, Castlight Elevate, Castlight Protect and Castlight Rewards.

Simulations Plus Company Profile

Simulations Plus, Inc. (Simulations Plus) develops and produces software for use in pharmaceutical research and for education, and provides consulting and contract research services to the pharmaceutical industry. The Company offers five software products for pharmaceutical research. ADMET (Absorption, Distribution, Metabolism, Excretion and Toxicity) Predictor is a computer program that takes molecular structures as inputs and predicts over 140 different properties for them at the rate of about 200,000 compounds per hour. MedChem Designer includes a small set of ADMET Predictor property predictions, allowing the chemist to modify molecular structures. MedChem Studio is a tool for medicinal and computational chemists for both data mining and for designing new drug-like molecules. DDDPlus simulates in-vitro laboratory experiments used to measure the rate of dissolution of the drug. GastroPlus simulates the absorption, pharmacokinetics, and pharmacodynamics of drugs.

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