Critical Survey: MeridianLink (NYSE:MLNK) and Materialise (NASDAQ:MTLS)

MeridianLink (NYSE:MLNK) and Materialise (NASDAQ:MTLS) are both small-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Risk & Volatility

MeridianLink has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Materialise has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Earnings & Valuation

This table compares MeridianLink and Materialise”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MeridianLink	$303.62 million	5.70	-$42.54 million	($0.67)	-34.21
Materialise	$277.18 million	1.56	$7.28 million	$0.19	38.58

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

Profitability

This table compares MeridianLink and Materialise’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MeridianLink	-16.57%	-9.57%	-4.47%
Materialise	3.73%	5.88%	3.59%

Institutional and Insider Ownership

82.7% of MeridianLink shares are owned by institutional investors. Comparatively, 19.3% of Materialise shares are owned by institutional investors. 21.3% of MeridianLink shares are owned by company insiders. Comparatively, 1.2% of Materialise shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MeridianLink	1	4	2	0	2.14
Materialise	0	0	1	0	3.00

MeridianLink presently has a consensus target price of $22.90, suggesting a potential downside of 0.09%. Materialise has a consensus target price of $9.50, suggesting a potential upside of 29.60%. Given Materialise’s stronger consensus rating and higher possible upside, analysts plainly believe Materialise is more favorable than MeridianLink.

Summary

Materialise beats MeridianLink on 8 of the 13 factors compared between the two stocks.

About MeridianLink

MeridianLink, Inc., a software and services company, provides software solutions for banks, credit unions, mortgage lenders, specialty lending providers, and consumer reporting agencies in the United States. The company offers MeridianLink One, a multi-product platform that can be tailored to meet the needs of customers as they digitally transform their organizations and adapt to changing business and consumer demands; MeridianLink Portal, a Point of Sale system that allows financial institutions to expand existing lending and deposit account; MeridianLink Opening, a cloud-based online account opening and deposit software solution; MeridianLink Consumer, a full loan solution suite to banks and credit unions; and MeridianLink DecisionLender, a loan origination software (LOS) for finance companies. It also provides MeridianLink Mortgage, a cloud-based software designed for financial professionals to optimize the end-to-end mortgage loan origination process; MeridianLink Collect, a web-based debt collection software; Mortgage Credit Link, a web-based order fulfillment hub; and MeridianLink Business, a cloud-based platform that offers business lending solutions for banks and credit unions. In addition, the company provides analytics and business intelligence tools through MeridianLink Engage, MeridianLink Consulting, MeridianLink Data Connect, and MeridianLink Insight; Data Verification Software Solution, a cloud-based order fulfillment hub for bankers and credit officers; and loan origination systems, other credit decisioning tools, and additional solution modules. MeridianLink, Inc. was founded in 1998 and is headquartered in Costa Mesa, California.

About Materialise

Materialise NV provides additive manufacturing and medical software, and 3D printing services in the Americas, Europe and Africa, and the Asia-Pacific. The company operates through three segments: Materialise Software, Materialise Medical, and Materialise Manufacturing. The Materialise Software segment offers software through programs and platforms that enable and enhance the functionality of 3D printers and of 3D printing operations. Its software interfaces between various types of 3D printers; and various software applications and capturing technologies, including computer-aided design/computer-aided manufacturing packages and 3D scanners. This segment serves 3D printing machine manufacturers; production companies and contract manufacturers in automotive, aerospace, consumer goods, and hearing aid industries; and 3D printing service bureaus through its sales force, Website, and third party distributors. The Materialise Medical segment provides medical software that allows medical-image based analysis, planning, and engineering, as well as patient-specific design and printing of surgical devices and implants. It serves medical device companies, hospitals, universities, research institutes, and industrial companies through its direct sales force, Website, and picture archiving and communication system. The Materialise Manufacturing segment provides 3D printing services, design and engineering services, and rapid prototyping and additive manufacturing of production parts to industrial and commercial customers. The company has collaboration agreements with Zimmer Biomet Holdings, Inc.; Encore Medical, L.P.; DePuy Synthes Companies of Johnson & Johnson; Limacorporate Spa; Mathys AG; Corin Ltd; Smith & Nephew Inc.; Corin Ltd; Medtronic Inc.; and Abbott Laboratories Inc. Materialise NV was incorporated in 1990 and is headquartered in Leuven, Belgium.