Borderfree (NASDAQ: BRDR) and Points International (NASDAQ:PCOM) are both small-cap e-commerce & auction services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Borderfree and Points International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Borderfree 0 0 0 0 N/A
Points International 0 0 2 0 3.00

Points International has a consensus target price of $13.50, suggesting a potential upside of 23.74%. Given Points International’s higher possible upside, analysts plainly believe Points International is more favorable than Borderfree.

Profitability

This table compares Borderfree and Points International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Borderfree -18.56% -16.07% -12.01%
Points International -0.43% 8.28% 3.47%

Valuation and Earnings

This table compares Borderfree and Points International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Borderfree N/A N/A N/A ($0.18) -77.78
Points International $321.82 million 0.50 -$1.51 million ($0.10) -109.10

Borderfree has higher earnings, but lower revenue than Points International. Points International is trading at a lower price-to-earnings ratio than Borderfree, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

37.4% of Points International shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Points International beats Borderfree on 8 of the 8 factors compared between the two stocks.

Borderfree Company Profile

Borderfree, Inc. (Borderfree) is engaged in the e-commerce, operating a technology and services platform to enable the United States retailers to transact with international shoppers. The retailers and brands, which the Company refers to as their customers, that integrate the Company’s solution use the Borderfree platform to develop an e-commerce business across Web, mobile and in-store channels. Borderfree manages all aspects of the international shopping experience, including site localization, multi-currency pricing, payment processing, fraud management, landed cost calculation, customs clearance and brokerage, and global logistics services. The Borderfree platform consists of technology, data, know-how and services that span: consumer experience localization; payments, compliance and risk management; global transportation and logistics; post-delivery customer care, and global consumer insights and marketing.

Points International Company Profile

Points International Ltd. (Points) provides a range of e-commerce and technology services to loyalty program operators using a common infrastructure. These services include a range of white label or private branded e-commerce services (Loyalty Currency Services) that enable the sale of loyalty currencies (such as frequent flyer miles, hotel points and credit card points), both retail and wholesale, and support the loyalty program consumer offerings and their back end operations. The Company offers the consumer-focused Points Loyalty Wallet that allows users to track, manage and access multiple loyalty rewards programs through the Points.com Website. It also offers Points Travel, which is private label travel e-commerce platform designed specifically for the loyalty industry. The Company operates the PointsHound.com Website, a hotel booking engine and loyalty currency aggregator built specifically for frequent travelers.

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