Critical Contrast: SPS Commerce (NASDAQ:SPSC) vs. Asana (NYSE:ASAN)

SPS Commerce (NASDAQ:SPSC) and Asana (NYSE:ASAN) are both mid-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Earnings & Valuation

This table compares SPS Commerce and Asana”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SPS Commerce	$583.80 million	12.07	$65.82 million	$1.83	104.00
Asana	$689.30 million	3.81	-$257.03 million	($1.17)	-9.84

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SPS Commerce	12.31%	12.41%	10.06%
Asana	-37.73%	-81.88%	-27.14%

Institutional & Insider Ownership

99.0% of SPS Commerce shares are owned by institutional investors. Comparatively, 26.2% of Asana shares are owned by institutional investors. 1.0% of SPS Commerce shares are owned by company insiders. Comparatively, 64.0% of Asana shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

SPS Commerce has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, Asana has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for SPS Commerce and Asana, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SPS Commerce	0	4	6	0	2.60
Asana	3	8	3	0	2.00

SPS Commerce presently has a consensus price target of $220.25, indicating a potential upside of 15.73%. Asana has a consensus price target of $14.07, indicating a potential upside of 22.20%. Given Asana’s higher possible upside, analysts plainly believe Asana is more favorable than SPS Commerce.

Summary

SPS Commerce beats Asana on 10 of the 14 factors compared between the two stocks.

About SPS Commerce

SPS Commerce, Inc. provides cloud-based supply chain management solutions in the United States and internationally. It offers solutions through the SPS Commerce, a cloud-based platform that enhances the way retailers, grocers, suppliers, distributors, and logistics firms manage and fulfill omnichannel orders, optimize sell-through performance, and automate new trading relationships. The company also provides Fulfillment, an electronic data interchange solution that scales as a business grows, where companies use a single system to manage orders and logistics from various sales channels, including wholesale, eCommerce, and marketplaces; and Analytics product that enables organizations to enhance visibility into how products are selling through a single connection across various sales channels, including wholesale, eCommerce, and marketplaces, as well as enhances access and usage of sales and inventory data through a combination of analytics applications, network of connections, and industry-leading expertise. In addition, it offers various complimentary products, such as assortment product, which simplifies the communication of robust, accurate item data by automatically translating item attributes, and hierarchies; and community product that allows organizations to accelerate digitization of their supply chain and improve collaboration with suppliers through change management and onboarding programs. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

About Asana

Asana, Inc., together with its subsidiaries, operates a work management platform for individuals, team leads, and executives in the United States and internationally. Its platform helps organizations to orchestrate work from daily tasks to cross-functional strategic initiatives; manage work across a portfolio of projects or workflows, see progress against goals, identify bottlenecks, resource constraints, and milestones; and communicate company-wide goals, monitor status, and oversee work across projects and portfolios to gain real-time insights. The company serves customers in various industries, such as technology, retail, education, non-profit, government, healthcare, hospitality, media, manufacturing, professional services, and financial services. The company was formerly known as Smiley Abstractions, Inc. and changed its name to Asana, Inc. in July 2009. Asana, Inc. was incorporated in 2008 and is headquartered in San Francisco, California.