Analyzing Ubisoft Entertainment (OTCMKTS:UBSFY) & SPS Commerce (NASDAQ:SPSC)

Ubisoft Entertainment (OTCMKTS:UBSFY) and SPS Commerce (NASDAQ:SPSC) are both mid-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Earnings & Valuation

This table compares Ubisoft Entertainment and SPS Commerce’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ubisoft Entertainment $2.60 billion 2.67 $120.42 million $0.58 19.09
SPS Commerce $312.63 million 18.35 $45.59 million $1.12 142.96

Ubisoft Entertainment has higher revenue and earnings than SPS Commerce. Ubisoft Entertainment is trading at a lower price-to-earnings ratio than SPS Commerce, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Ubisoft Entertainment has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500. Comparatively, SPS Commerce has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Profitability

This table compares Ubisoft Entertainment and SPS Commerce’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ubisoft Entertainment N/A N/A N/A
SPS Commerce 13.02% 10.28% 8.23%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Ubisoft Entertainment and SPS Commerce, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ubisoft Entertainment 2 2 7 0 2.45
SPS Commerce 0 0 8 0 3.00

Ubisoft Entertainment currently has a consensus price target of $56.20, suggesting a potential upside of 407.68%. SPS Commerce has a consensus price target of $143.88, suggesting a potential downside of 10.14%. Given Ubisoft Entertainment’s higher probable upside, research analysts plainly believe Ubisoft Entertainment is more favorable than SPS Commerce.

Institutional and Insider Ownership

0.1% of Ubisoft Entertainment shares are owned by institutional investors. Comparatively, 97.1% of SPS Commerce shares are owned by institutional investors. 1.6% of SPS Commerce shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

SPS Commerce beats Ubisoft Entertainment on 11 of the 14 factors compared between the two stocks.

About Ubisoft Entertainment

Ubisoft Entertainment SA is a holding company, which engages in the production, publication, and distribution of multimedia, audiovisual, and information technology products. It creates and publishes video games, educational and cultural software, cartoons and literary, and cinematographic and television works. The company was founded by Yves Guillemot on March 28, 1986 and is headquartered in Montreuil sous Bois, France.

About SPS Commerce

SPS Commerce, Inc. provides cloud-based supply chain management services. The firm serves retailers, suppliers, grocers, distributors and logistics firms to orchestrate the management of item data, order fulfillment, inventory control and sales analytics across all channels. Its SPS Commerce cloud services platform offers Trading Partner Community, Fulfillment, Assortment, Analytics, Sourcing, and Other Trading Partner Solutions. The company was founded by Gary W. Anderson and Roger Anderson on January 28, 1987 and is headquartered in Minneapolis, MN.

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