Critical Contrast: i3 Verticals (NASDAQ:IIIV) and PubMatic (NASDAQ:PUBM)

i3 Verticals (NASDAQ:IIIV) and PubMatic (NASDAQ:PUBM) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Valuation & Earnings

This table compares i3 Verticals and PubMatic”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
i3 Verticals	$213.16 million	2.67	$17.87 million	$0.70	29.06
PubMatic	$282.93 million	1.96	-$14.46 million	($0.38)	-31.37

i3 Verticals has higher earnings, but lower revenue than PubMatic. PubMatic is trading at a lower price-to-earnings ratio than i3 Verticals, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

84.2% of i3 Verticals shares are owned by institutional investors. Comparatively, 64.3% of PubMatic shares are owned by institutional investors. 60.1% of i3 Verticals shares are owned by insiders. Comparatively, 27.8% of PubMatic shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for i3 Verticals and PubMatic, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
i3 Verticals	0	3	5	0	2.63
PubMatic	1	1	6	1	2.78

i3 Verticals presently has a consensus price target of $29.83, suggesting a potential upside of 46.67%. PubMatic has a consensus price target of $12.88, suggesting a potential upside of 8.01%. Given i3 Verticals’ higher possible upside, equities analysts plainly believe i3 Verticals is more favorable than PubMatic.

Risk & Volatility

i3 Verticals has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500. Comparatively, PubMatic has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500.

Profitability

This table compares i3 Verticals and PubMatic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
i3 Verticals	8.59%	4.19%	3.28%
PubMatic	-6.21%	-6.98%	-2.60%

Summary

i3 Verticals beats PubMatic on 10 of the 15 factors compared between the two stocks.

About i3 Verticals

i3 Verticals, Inc. provides integrated payment and software solutions primarily to the public sector and healthcare markets in the United States. It operates in two segments, Software and Services, and Merchant Services. The company offers payment processing services that enables upper and lower court case management, collections, finance and accounting, motor vehicle and carrier registration, e-filing and taxation, license plate inventory, property tax management, utility billing, professional licensing, document workflow, and law enforcement software; assists public schools in completing payment processing functions, including accepting payments for online or at school lunches, and school activities. It also provides software platforms, such as electronic healthcare records and revenue cycle management solutions; insurance adjudication, patient engagement platforms, billing, scheduling, and integrated payments solutions; and workflow software and associated professional services to medical insurance payers. In addition, the company engages in software licenses and subscriptions, transaction-based fees, ongoing software maintenance and support, and other software-related solutions; and payment processing and gateway fees, as well as other related fixed transaction or service fees. Further, it sells equipment, and offers non-software related professional services. The company offers its solutions to clients through direct sales force; distribution partners comprising independent software vendors, independent sales organizations, and value-added resellers. i3 Verticals, Inc. was founded in 2012 and is headquartered in Nashville, Tennessee.

About PubMatic

PubMatic, Inc., a technology company, engages in the provision of a cloud infrastructure platform that enables real-time programmatic advertising transactions for digital content creators, advertisers, agencies, agency trading desks, and demand side platforms worldwide. Its PubMatic SSP, a sell-side platform, used for the purchase and sale of digital advertising inventory for publishers and buyers. The company also provides solutions, including OpenWrap, a header bidding solution; Openwrap OTT, a prebid-powered unified bidding solution; Openwrap SDK, an enterprise-grade management tools and analytics; Connect, a solution that provides additional data and insights to publishers and buyers; Activate, which allows buyers to execute direct deals on its platform across publisher inventory; Convert, a commerce media solution; and Identity Hub, an ID management tool for publishers that leverages specialized technology?infrastructure?to simplify the complex alternative identifier marketplace. Its platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. The company was incorporated in 2006 and is based in Redwood City, California.