Head-To-Head Comparison: CorVel (NASDAQ:CRVL) and SPS Commerce (NASDAQ:SPSC)

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

Insider and Institutional Ownership

99.0% of SPS Commerce shares are owned by institutional investors. Comparatively, 51.4% of CorVel shares are owned by institutional investors. 1.0% of SPS Commerce shares are owned by insiders. Comparatively, 44.6% of CorVel shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SPS Commerce	1	7	2	1	2.27
CorVel	0	1	0	0	2.00

SPS Commerce currently has a consensus target price of $87.40, suggesting a potential upside of 36.48%. Given SPS Commerce’s stronger consensus rating and higher probable upside, research analysts clearly believe SPS Commerce is more favorable than CorVel.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SPS Commerce	12.42%	12.73%	10.62%
CorVel	11.23%	30.15%	17.62%

Volatility and Risk

SPS Commerce has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, CorVel has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SPS Commerce	$751.51 million	3.19	$93.34 million	$2.45	26.14
CorVel	$895.59 million	3.06	$95.17 million	$2.04	26.25

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

Summary

SPS Commerce beats CorVel on 8 of the 15 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 CorVel

CorVel Corporation provides workers’ compensation, auto, liability, and health solutions. It applies technology, including artificial intelligence, machine learning, and natural language processing to enhance the managing of episodes of care and the related health care costs. The company also offers network solutions services, including automated medical fee auditing, preferred provider management and reimbursement, retrospective utilization review, facility claim review, professional review, pharmacy, directed care, clearinghouse, independent medical examination, and inpatient medical bill review services, as well as Medicare solutions. In addition, it provides a range of patient management services, such as claims management, case management, 24/7 nurse triage, utilization management, vocational rehabilitation, and life care planning, as well as processing of claims for self-insured payors with respect to property and casualty insurance. The company offers solutions to employers, third party administrators, insurance companies, and government agencies to assist them in managing the medical costs and monitoring the quality of care associated with healthcare claims. CorVel Corporation was incorporated in 1987 and is based in Fort Worth, Texas.