AgroFresh Solutions (NASDAQ:AGFS) and Grid Dynamics (NASDAQ:GDYN) are both small-cap basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Volatility and Risk

AgroFresh Solutions has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Grid Dynamics has a beta of -0.02, suggesting that its stock price is 102% less volatile than the S&P 500.

Insider and Institutional Ownership

72.1% of AgroFresh Solutions shares are held by institutional investors. Comparatively, 66.3% of Grid Dynamics shares are held by institutional investors. 1.6% of AgroFresh Solutions shares are held by insiders. Comparatively, 19.5% of Grid Dynamics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares AgroFresh Solutions and Grid Dynamics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AgroFresh Solutions $170.07 million 0.54 -$60.83 million ($0.28) -6.43
Grid Dynamics N/A N/A -$3.32 million N/A N/A

Grid Dynamics has lower revenue, but higher earnings than AgroFresh Solutions.

Profitability

This table compares AgroFresh Solutions and Grid Dynamics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AgroFresh Solutions -35.77% -6.74% -2.70%
Grid Dynamics N/A -66.44% -1.48%

Analyst Ratings

This is a breakdown of current ratings and target prices for AgroFresh Solutions and Grid Dynamics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AgroFresh Solutions 0 0 3 0 3.00
Grid Dynamics 0 0 1 0 3.00

AgroFresh Solutions currently has a consensus price target of $5.50, suggesting a potential upside of 205.56%. Given AgroFresh Solutions’ higher probable upside, research analysts plainly believe AgroFresh Solutions is more favorable than Grid Dynamics.

Summary

AgroFresh Solutions beats Grid Dynamics on 6 of the 10 factors compared between the two stocks.

AgroFresh Solutions Company Profile

AgroFresh Solutions, Inc. provides data-driven solutions worldwide. The company uses 1-Methylcyclopropene technology, an ethylene action inhibitor to maintain freshness and extend the shelf life of various fresh produce. Its solutions enable growers and packers of fresh produce to preserve and enhance the freshness, quality, and value of fresh produce, including apples, pears, kiwifruit, plums, persimmons avocados, and bananas, as well as flowers. The company's flagship product is the SmartFresh system that regulates the post-harvest ripening effects of ethylene to preserve the texture, firmness, taste, and appearance of produce during storage, transportation, and retail display. It also provides Harvista technology for use in pre-harvest management of pome fruit, apples, pears, cherries, and blueberries. In addition, the company is developing RipeLock Quality System, a proprietary technology that extends the shelf life of bananas; FreshCloud, a suite of monitoring and screening solutions; and LandSpring, a technology that minimizes stress induced ethylene effects in vegetable seedling transplants allowing for post-transplant vigor. The company was formerly known as Boulevard Acquisition Corp. and changed its name to AgroFresh Solutions, Inc. in July 2015. AgroFresh Solutions, Inc. is headquartered in Philadelphia, Pennsylvania.

Grid Dynamics Company Profile

Grid Dynamics International, Inc. is an engineering IT services company, provides transformative and mission-critical cloud solutions for retail, finance, and technology sectors. It offers big data engineering services, including consulting, design, implementation, and operational support of in-stream and batch processing pipelines; QA automation services, including UI, API, mobile, performance, batch processing, technical computing, regression, continuous, and integration testing services; test data and test environment management; quality KPI definition and tracking; test automation framework development; and best practices and toolset workshops; cloud engineering; UI/full stack engineering; release engineering / DevOps; and search engine and mobile application development services. The company was founded in 2006 and is based in San Ramon, California with additional offices in Plano, Texas; Saint Petersburg and Saratov, Russia; Kharkiv, Kyiv, and Lviv, Ukraine; Belgrade, Serbia; and Krakow, Poland. As of April 7, 2017, Grid Dynamics International, Inc. operates as a subsidiary of Automated Systems Holdings Limited.

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