SOS vs. MeridianLink: Which Small-Cap Stock Holds More Promise?
Discover the strengths and weaknesses of SOS and MeridianLink stocks based on earnings, risk, and analyst recommendations.
When it comes to small-cap business services companies, SOS Limited (NYSE:SOS) and MeridianLink, Inc. (NYSE:MLNK) present intriguing investment opportunities. To determine which stock might be the better choice, we examine their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations, and dividends.
**Valuation and Earnings**
SOS Limited reports a gross revenue of $231.42 million with a price/sales ratio of 0.08. However, the company shows a net income loss of $13.60 million. In contrast, MeridianLink boasts a higher gross revenue of $316.30 million and a price/sales ratio of 3.97, but also reports a net income loss of $29.77 million and an earnings per share (EPS) of ($0.38), translating to a price/earnings ratio of -42.84. While SOS has higher earnings, MeridianLink surpasses SOS in revenue.
**Volatility and Risk**
Investors must consider stock volatility. SOS has a beta of 2.08, indicating it is 108% more volatile than the S&P 500. MeridianLink features a beta of 0.93, making it 7% less volatile compared to the index. This suggests that MeridianLink may be less risky in terms of price fluctuation.
**Analyst Recommendations**
According to MarketBeat.com, MeridianLink receives stronger analyst recommendations with a consensus rating score of 2.00, and a target price of $19.42, suggesting a potential upside of 19.27%. No ratings were available for SOS, making MeridianLink the more favorable option among analysts.
**Profitability and Ownership**
MeridianLink again leads in profitability metrics with net margins of -9.11%, a return on equity of -5.14%, and a return on assets of -2.26%. Furthermore, institutional and insider ownership statistics highlight that 82.7% of MeridianLink's shares are institutionally owned, compared to only 1.9% for SOS. This strong institutional backing indicates a higher confidence in MeridianLink's market performance.
**Summary**
On comparing 12 factors, MeridianLink outshines SOS in 7 categories, making it a stronger contender. While SOS offers robust earnings, its higher volatility and lack of analyst support tilt the scales in favor of MeridianLink, especially for investors seeking stability and growth potential in the small-cap sector.