Analyzing QuinStreet (NASDAQ:QNST) and InnerWorkings (NASDAQ:INWK)

QuinStreet (NASDAQ:QNST) and InnerWorkings (NASDAQ:INWK) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.

Risk and Volatility

QuinStreet has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, InnerWorkings has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for QuinStreet and InnerWorkings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QuinStreet 0 0 6 0 3.00
InnerWorkings 0 2 0 0 2.00

QuinStreet currently has a consensus price target of $19.00, indicating a potential upside of 18.60%. InnerWorkings has a consensus price target of $10.00, indicating a potential upside of 173.22%. Given InnerWorkings’ higher possible upside, analysts plainly believe InnerWorkings is more favorable than QuinStreet.

Valuation and Earnings

This table compares QuinStreet and InnerWorkings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
QuinStreet $404.36 million 1.99 $15.93 million $0.32 50.06
InnerWorkings $1.12 billion 0.17 -$76.17 million ($0.08) -45.75

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

Insider & Institutional Ownership

95.9% of QuinStreet shares are held by institutional investors. Comparatively, 83.6% of InnerWorkings shares are held by institutional investors. 12.5% of QuinStreet shares are held by insiders. Comparatively, 6.4% of InnerWorkings shares are held 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.

Profitability

This table compares QuinStreet and InnerWorkings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QuinStreet 14.50% 8.30% 5.86%
InnerWorkings -6.91% -1.08% -0.36%

Summary

QuinStreet beats InnerWorkings on 11 of the 14 factors compared between the two stocks.

QuinStreet Company Profile

QuinStreet, Inc., an Internet performance marketing company, provides customer acquisition services for its clients in the United States and internationally. It offers online marketing services to its clients in the form of qualified leads, inquiries, clicks, calls, applications, customers, display advertisements, or impressions through its Websites or third-party publishers. The company provides its services in various verticals, such as financial services, education, business-to-business technology, and home services. QuinStreet, Inc. was founded in 1999 and is headquartered in Foster City, California.

InnerWorkings Company Profile

InnerWorkings, Inc. provides marketing execution solutions in North America and internationally. The company's software applications and databases create an integrated solution that stores, analyzes, and tracks the production capabilities of its supplier network, as well as detailed pricing data. It offers outsourced print management solutions that encompass the design, sourcing, and delivery of printed marketing materials, including direct mail, in-store signage, and marketing collateral; and outsourced solutions for the design, sourcing, and delivery of branded merchandise and product packaging. The company also assists clients with the management of events, promotions spending, and related procurement needs; and designs, sources, and installs point of sale displays, permanent retail fixtures, and overall store design, as well as offers on-site outsourced creative studio, digital marketing, and on-demand creative services. In addition, it provides fulfillment and logistics services, such as kitting and assembly, inventory management, and pre-sorting postage. Further, the company offers creative services comprising copywriting, graphics and Website design, identity work and marketing collateral development, and image and print-ready page processing and proofing capability services. It serves corporate clients in a range of industries, such as retail, financial services, hospitality, consumer packaged goods, non-profits, healthcare, pharmaceuticals, food and beverage, broadcasting and cable, and transportation. The company was founded in 2001 and is headquartered in Chicago, Illinois.

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