Sykes Enterprises (NASDAQ:SYKE) and Crexendo (OTCMKTS:CXDO) are both small-cap business services companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Insider & Institutional Ownership

86.8% of Sykes Enterprises shares are held by institutional investors. 2.9% of Sykes Enterprises shares are held by insiders. Comparatively, 77.2% of Crexendo shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Sykes Enterprises and Crexendo, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sykes Enterprises 0 1 1 0 2.50
Crexendo 0 0 0 0 N/A

Sykes Enterprises presently has a consensus target price of $36.00, indicating a potential upside of 20.85%. Given Sykes Enterprises’ higher probable upside, equities research analysts clearly believe Sykes Enterprises is more favorable than Crexendo.

Volatility and Risk

Sykes Enterprises has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Crexendo has a beta of 2.87, meaning that its stock price is 187% more volatile than the S&P 500.

Profitability

This table compares Sykes Enterprises and Crexendo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sykes Enterprises 1.39% 10.28% 6.68%
Crexendo -1.87% 0.40% 0.16%

Earnings and Valuation

This table compares Sykes Enterprises and Crexendo’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sykes Enterprises $1.59 billion 0.80 $32.21 million $2.00 14.90
Crexendo $10.38 million 2.33 -$1.02 million N/A N/A

Sykes Enterprises has higher revenue and earnings than Crexendo.

Summary

Sykes Enterprises beats Crexendo on 8 of the 11 factors compared between the two stocks.

About Sykes Enterprises

Sykes Enterprises, Incorporated, together with its subsidiaries, provides multichannel demand generation and global customer engagement services. Its customer care services include handling billing inquiries and claims, activating customer accounts, resolving complaints, cross-selling/up-selling, and prequalifying and warranty management, as well as providing health information and dispatching roadside assistance. The company's technical support services comprise support around complex networks, hardware and software, communications equipment, Internet access technology, and Internet portal usage. It also provides customer acquisition services, which focuses around digital marketing, demand generation, and in-bound sales conversion, as well as inbound and outbound up-selling its clients' products and services. It also provides technical staffing services to outsourced corporate help desk services; and fulfillment services, such as order and payment processing, inventory control, product delivery, and product returns handling. The company offers its services through phone, e-mail, social media, text messaging, chat, and digital self-service support. Sykes Enterprises, Incorporated provides its services to corporations, medium-sized businesses, and public institutions in the communications, financial services, technology, transportation and leisure, healthcare, retail, and other industries. It operates in the United States, Canada, Latin America, Australia, the Asia Pacific Rim, Europe, the Middle East, and Africa. Sykes Enterprises, Incorporated was founded in 1977 and is headquartered in Tampa, Florida.

About Crexendo

Crexendo, Inc., a cloud services company, provides cloud telecommunications services, broadband Internet services, and other cloud business services for businesses in North America and internationally. It operates in two segments, Cloud Telecommunications and Web Services. The Cloud Telecommunications segment provides telecommunications services that transmit calls using IP or cloud technology, which converts voice signals into digital data packets for transmission over the Internet or cloud; and broadband Internet services, as well as engages in the sale and lease of cloud telecommunications equipment. This segment offers hardware and software, and unified communication solutions for businesses using IP or cloud technology over high-speed Internet connection through various devices and user interfaces, such as desktop phones, and mobile and desktop applications. The Web Services segment provides Website hosting, telecom installation, and professional services. The company was formerly known as iMergent, Inc. and changed its name to Crexendo, Inc. in May 2011. Crexendo, Inc. was founded in 1995 and is headquartered in Tempe, Arizona.

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