GigaMedia (NASDAQ:GIGM) and Model N (NYSE:MODN) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations for GigaMedia and Model N, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GigaMedia 0 0 0 0 N/A
Model N 0 2 6 0 2.75

Model N has a consensus price target of $22.83, indicating a potential upside of 14.00%. Given Model N’s higher possible upside, analysts plainly believe Model N is more favorable than GigaMedia.

Insider and Institutional Ownership

4.7% of GigaMedia shares are owned by institutional investors. Comparatively, 75.2% of Model N shares are owned by institutional investors. 1.0% of GigaMedia shares are owned by company insiders. Comparatively, 1.2% of Model N shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares GigaMedia and Model N’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GigaMedia $7.10 million 3.92 -$3.19 million N/A N/A
Model N $154.63 million 4.21 -$28.20 million ($0.73) -27.44

GigaMedia has higher earnings, but lower revenue than Model N.

Profitability

This table compares GigaMedia and Model N’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GigaMedia -44.71% -4.59% -4.28%
Model N -20.30% -56.80% -15.63%

Volatility & Risk

GigaMedia has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, Model N has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Summary

Model N beats GigaMedia on 8 of the 11 factors compared between the two stocks.

About GigaMedia

GigaMedia Limited provides digital entertainment services in Taiwan, Hong Kong, and Macau. The company offers mobile and browser-based casual games through FunTown-branded platform. Its portfolio of PC-based casual games include MahJong, a traditional Chinese tile game; sports games, Web-based RPG, and mobile games; online card games; and chance-based games, including bingo, lotto, horse racing, Sic-Bo, slots, and various casual games. The company also provides Tales Runner, a multi-player online obstacle running game in which players competes by running, jumping, dashing and using items. In addition, it owns and operates GigaCloud, a provider of cloud computing solutions and related services focused on the cloud services market for SMEs in Taiwan. GigaMedia Limited was founded in 1997 and is headquartered in Taipei, Taiwan.

About Model N

Model N, Inc. provides revenue management cloud solutions for the life sciences and technology companies. The company's cloud-based revenue management solutions include Revenue Cloud for Pharma, Revenue Cloud for Med Tech, and Revenue Cloud for Semiconductors and High Tech Manufacturing. It develops software applications, such as managed care and government pricing for life science companies; and channel incentives for technology companies. The company also offers revenue management processes, such as pricing, contracting, rebates, incentives, channel management, and regulatory compliance. In addition, Model N, Inc. provides implementation, managed, strategic, and customer support services. It primarily serves large and mid-sized organizations worldwide through its direct sales force. Model N, Inc. was founded in 1999 and is headquartered in San Mateo, California, with additional offices in the United States, India, and Switzerland.

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