Arco Platform (NASDAQ:ARCE) and Lincoln Educational Services (NASDAQ:LINC) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Analyst Ratings

This is a summary of recent recommendations and price targets for Arco Platform and Lincoln Educational Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arco Platform 0 1 4 0 2.80
Lincoln Educational Services 0 0 1 0 3.00

Arco Platform presently has a consensus price target of $27.00, suggesting a potential downside of 45.30%. Lincoln Educational Services has a consensus price target of $3.50, suggesting a potential upside of 88.17%. Given Lincoln Educational Services’ stronger consensus rating and higher possible upside, analysts clearly believe Lincoln Educational Services is more favorable than Arco Platform.

Valuation & Earnings

This table compares Arco Platform and Lincoln Educational Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arco Platform $100.06 million 11.20 $6.13 million $0.27 182.81
Lincoln Educational Services $263.20 million 0.18 -$6.55 million ($0.27) -6.89

Arco Platform has higher earnings, but lower revenue than Lincoln Educational Services. Lincoln Educational Services is trading at a lower price-to-earnings ratio than Arco Platform, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

91.0% of Arco Platform shares are owned by institutional investors. Comparatively, 63.5% of Lincoln Educational Services shares are owned by institutional investors. 6.3% of Lincoln Educational Services shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Arco Platform and Lincoln Educational Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arco Platform N/A N/A N/A
Lincoln Educational Services -1.94% -14.22% -3.80%

Summary

Arco Platform beats Lincoln Educational Services on 9 of the 13 factors compared between the two stocks.

Arco Platform Company Profile

Arco Platform Limited, a technology company in the education sector, provides a pedagogical system with technology-enabled features to deliver educational content to private schools in Brazil. The company's curriculum solutions provide educational content from basic to secondary education K-12 curriculum in printed and digital formats delivered through its platform. As of March 31, 2019, it had a network consisted of 1,462 partner schools and 498,553 enrolled students. The company's activities also comprise editing, publishing, advertising, and sale of educational content for private schools. It serves students, teachers, administrators, and parents. The company was founded in 2004 and is based in Sao Paulo, Brazil.

Lincoln Educational Services Company Profile

Lincoln Educational Services Corporation, together with its subsidiaries, provides various career-oriented post-secondary education services to high school graduates and working adults in the United States. The company operates in three segments: Transportation and Skilled Trades; Healthcare and Other Professions; and Transitional. It offers associate's degree, and diploma and certificate programs in automotive technology, skilled trades, healthcare services, hospitality services, and information technology areas. The company operates 22 schools in 14 states under the Lincoln Technical Institute, Lincoln College of Technology, Lincoln Culinary Institute, Euphoria Institute of Beauty Arts and Sciences, and associated brand names. As of December 31, 2018, it had 10,525 students enrolled. Lincoln Educational Services Corporation was founded in 1946 and is headquartered in West Orange, New Jersey.

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