Reviewing Performant Financial (NASDAQ:PFMT) and Slack (NASDAQ:WORK)

Performant Financial (NASDAQ:PFMT) and Slack (NYSE:WORK) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Earnings and Valuation

This table compares Performant Financial and Slack’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Performant Financial $155.67 million 0.35 -$8.01 million ($0.32) -3.19
Slack $400.55 million 35.30 -$140.68 million N/A N/A



Performant Financial has higher earnings, but lower revenue than Slack.

Profitability

This table compares Performant Financial and Slack’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Performant Financial -20.11% -32.75% -16.94%
Slack N/A N/A N/A

Analyst Ratings

This is a summary of recent ratings and target prices for Performant Financial and Slack, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Performant Financial 0 1 0 0 2.00
Slack 0 8 9 0 2.53

Slack has a consensus price target of $36.44, indicating a potential upside of 40.20%. Given Slack’s stronger consensus rating and higher possible upside, analysts clearly believe Slack is more favorable than Performant Financial.

Insider & Institutional Ownership

56.5% of Performant Financial shares are owned by institutional investors. Comparatively, 19.4% of Slack shares are owned by institutional investors. 32.3% of Performant Financial shares are owned by 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.

Summary

Slack beats Performant Financial on 8 of the 11 factors compared between the two stocks.

About Performant Financial

Performant Financial Corporation provides technology-enabled audit, recovery, outsource customer, and related analytics services in the United States. The company offers recovery services primarily to the government-supported student loan industry serving guaranty agencies, private financial institutions, and the Department of Education; and restructures and recovers student loans issued directly by banks to students outside of federal lending programs. It also provides audit and recovery services related to improper payments in the healthcare market; and recovery and risk management advisory services to the Department of the Treasury and various financial institutions, as well as to federal, state, and municipal tax authorities. In addition, the company offers services from post-and pre-payment audit of healthcare claims to detection of fraud, waste and abuse of healthcare claims, to coordination of benefits and pharmacy fraud detection. The company was formerly known as DCS Holdings, Inc. and changed its name to Performant Financial Corporation in 2005. Performant Financial Corporation was founded in 1976 and is headquartered in Livermore, California.

About Slack

Slack Technologies, Inc. operates Slack, a business technology software platform in the United States and internationally. Its platform brings together people, applications, and data, as well as sells its offering under a software-as-a-service model. The company was formerly known as Tiny Speck, Inc. and changed its name to Slack Technologies, Inc. in 2014. Slack Technologies, Inc. was founded in 2009 and is headquartered in San Francisco, California.

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