Analyzing Veradigm (NASDAQ:MDRX) and Telos (NASDAQ:TLS)

Veradigm (NASDAQ:MDRX) and Telos (NASDAQ:TLS) are both small-cap business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Institutional and Insider Ownership

62.1% of Telos shares are owned by institutional investors. 2.3% of Veradigm shares are owned by company insiders. Comparatively, 12.4% of Telos shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Veradigm has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Telos has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Profitability

This table compares Veradigm and Telos’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Veradigm	N/A	N/A	N/A
Telos	-22.22%	-22.69%	-17.72%

Analyst Ratings

This is a summary of recent ratings and target prices for Veradigm and Telos, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Veradigm	0	3	2	0	2.40
Telos	0	3	3	0	2.50

Veradigm currently has a consensus target price of $12.00, indicating a potential upside of 24.35%. Telos has a consensus target price of $5.00, indicating a potential upside of 29.53%. Given Telos’ stronger consensus rating and higher possible upside, analysts plainly believe Telos is more favorable than Veradigm.

Earnings & Valuation

This table compares Veradigm and Telos’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Veradigm	$1.50 billion	0.69	$134.44 million	N/A	N/A
Telos	$139.78 million	1.98	-$34.42 million	($0.44)	-8.77

Veradigm has higher revenue and earnings than Telos.

Summary

Telos beats Veradigm on 7 of the 12 factors compared between the two stocks.

About Veradigm

Veradigm Inc., a healthcare technology company, provides information technology solutions and services to healthcare organizations in the United States, Canada, and internationally. It offers electronic health records (EHR), information connectivity, private cloud hosting, outsourcing, analytics, patient access, and population health management solutions. The company operates through two segments, Hospitals and Large Physician Practices, and Veradigm. The Hospitals and Large Physician Practices segment provides integrated clinical and financial management solutions, which primarily include EHR-related software; and related installation, support and maintenance, outsourcing, private cloud hosting, and revenue cycle management services. The Veradigm segment offers payer and life sciences solutions, which are primarily targeted at payers, life sciences companies, and other healthcare stakeholders; and software applications for patient engagement and EHR software to single-specialty, and small and mid-sized physician practices, including related clinical, financial, administrative, and operational solutions. Its solutions enable clients to transition, analyze, and coordinate care, and enhance the healthcare delivery across the care community. The company serves physicians, hospitals, governments and militaries, health systems, health plans, life-sciences companies, retail clinics, surgery centers, retail pharmacies, pharmacy benefit managers, insurance companies, employer wellness clinics, consumers, lab companies, urgent care facilities, and venture capital firms, as well as post-acute organizations, such as home health and hospice agencies. The company was formerly known as Allscripts Healthcare Solutions, Inc. and changed its name to Veradigm Inc. in January 2023. Veradigm Inc. was founded in 1986 and is headquartered in Chicago, Illinois.

About Telos

Telos Corporation, together with its subsidiaries, provides cyber, cloud, and enterprise security solutions worldwide. The company operates in two segments, Security Solutions and Secure Networks. It provides Xacta, a platform for enterprise cyber risk management and security compliance automation; and consulting, assessment and compliance, engineering and evaluation, operations, and penetration testing services. The company also offers Telos Automated Message Handling System, a web-based organizational message distribution and management for mission-critical communications used by military field operatives; and Telos Advanced Cyber Analytics solution, which is a threat feed source of global Internet Protocol addresses known to engage in potentially malicious activity, including mass scanning and generic opportunistic attacks; and Telos Ghost, a solution to eliminate cyberattack surfaces by obfuscating and encrypting data, masking user identity and location, and hiding network resources, as well as provides security and privacy for intelligence gathering, cyber threat protection, securing critical infrastructure, and protecting communications and applications. In addition, the company provides IDTrust360, an enterprise digital trusted identity risk platform for extending flexible hybrid cloud identity services; and ONYX, a touchless fingerprint biometric solution for mobile devices. Further, it offers secure mobility solutions that enable remote work and minimize operational and security concerns across and beyond the enterprise; and network management and defense services for operating, administrating, and defending complex enterprise networks and services for defensive cyber operations. It serves the United States federal government, large commercial businesses, state and local governments, and international customers. Telos Corporation was founded in 1968 and is headquartered in Ashburn, Virginia.