Critical Analysis: Performant Financial Corporation (PFMT) and Vectrus (VEC)
Performant Financial Corporation (NASDAQ: PFMT) and Vectrus (NYSE:VEC) are both small-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.
Insider & Institutional Ownership
54.7% of Performant Financial Corporation shares are held by institutional investors. Comparatively, 85.1% of Vectrus shares are held by institutional investors. 33.6% of Performant Financial Corporation shares are held by insiders. Comparatively, 3.9% of Vectrus shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Performant Financial Corporation and Vectrus’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Performant Financial Corporation||-13.74%||-6.81%||-3.17%|
Risk & Volatility
Performant Financial Corporation has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Vectrus has a beta of 2.21, indicating that its share price is 121% more volatile than the S&P 500.
This is a breakdown of current ratings and price targets for Performant Financial Corporation and Vectrus, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Performant Financial Corporation||0||1||0||0||2.00|
Valuation & Earnings
This table compares Performant Financial Corporation and Vectrus’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Performant Financial Corporation||$134.02 million||0.69||$6.52 million||($0.36)||-5.03|
|Vectrus||$1.12 billion||0.32||$45.00 million||$1.90||16.78|
Vectrus has higher revenue and earnings than Performant Financial Corporation. Performant Financial Corporation is trading at a lower price-to-earnings ratio than Vectrus, indicating that it is currently the more affordable of the two stocks.
Vectrus beats Performant Financial Corporation on 10 of the 12 factors compared between the two stocks.
Performant Financial Corporation Company Profile
Performant Financial Corporation (Performant) provides technology-enabled recovery and related analytics services in the United States. The Company’s services identify and recover delinquent or defaulted assets and improper payments for both government and private clients in a range of markets. The Company provides its services on an outsourced basis where the Company handles many or all aspects of its clients’ recovery processes. The Company uses its technology-enabled services platform to provide recovery and analytics services in a range of markets for the identification and recovery of student loans, improper healthcare payments and delinquent state tax and federal treasury receivables. It provides recovery services to the government-supported student loan industry and its clients include the Department of Education and Guaranty Agencies, as well as private financial institutions. The Company provides recovery services related to improper payments in the healthcare market.
Vectrus Company Profile
Vectrus, Inc. is a provider of services to the United States Government across the world. The Company offers services, including infrastructure asset management, logistics and supply chain management, and information technology and network communication. Its infrastructure asset management services support the United States Army, Air Force and Navy, and include infrastructure services, security, warehouse management and distribution, ammunition management, civil engineering, air base maintenance and operations, communications, emergency services, transportation, and life support activities at various global military installations. Its logistics and supply chain management services support and maintain the vehicle and equipment stocks of the United States Army and Marine Corps. Its information technology and network communication services consist of sustainment of communications systems, network security, systems installation and life cycle management of information technology systems.
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