Shopify (SHOP) & Benefitfocus (BNFT) Head to Head Analysis

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Shopify (NASDAQ: BNFT) and Benefitfocus (NASDAQ:BNFT) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Shopify and Benefitfocus, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shopify 0 7 10 0 2.59
Benefitfocus 0 2 8 0 2.80

Shopify presently has a consensus target price of $161.13, suggesting a potential upside of 15.11%. Benefitfocus has a consensus target price of $37.78, suggesting a potential downside of 12.65%. Given Shopify’s higher possible upside, equities analysts clearly believe Shopify is more favorable than Benefitfocus.

Earnings and Valuation

This table compares Shopify and Benefitfocus’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shopify $673.30 million 22.11 -$39.99 million ($0.42) -333.26
Benefitfocus $256.73 million 5.37 -$25.87 million ($0.79) -54.75

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

Profitability

This table compares Shopify and Benefitfocus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shopify -6.12% -3.77% -3.44%
Benefitfocus -16.55% N/A -21.21%

Risk & Volatility

Shopify has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, Benefitfocus has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Institutional and Insider Ownership

60.7% of Shopify shares are held by institutional investors. Comparatively, 93.6% of Benefitfocus shares are held by institutional investors. 29.0% of Benefitfocus shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Shopify beats Benefitfocus on 8 of the 14 factors compared between the two stocks.

About Shopify

Shopify Inc. provides a cloud-based multi-channel commerce platform for small and medium-sized businesses in Canada, the United States, the United Kingdom, Australia, and internationally. Its platform provides merchants with a single view of business and customers in various sales channels, including Web and mobile storefronts, physical retail locations, social media storefronts, and marketplaces; and enables to manage products and inventory, process orders and payments, ship orders, build customer relationships, leverage analytics and reporting, and access financing. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was founded in 2004 and is headquartered in Ottawa, Canada.

About Benefitfocus

Benefitfocus, Inc. provides cloud-based benefits management platform for consumers, employers, insurance carriers, and brokers in the United States. It operates through Employer and Carrier segments. The company's products for insurance carriers include Marketplaces, which are online shopping environments; eEnrollment that provides online enrollment for benefits; eBilling, an electronic invoice presentment and payment solution; eExchange, a solution for communication; eSales for carriers and brokers to organize and manage accounts, track leads, generate quotes, and create proposals for products; and Core & Advanced Analytics, a data analytics solution. Its products for employers include Benefitfocus Marketplace that streamlines online enrollment, employee communication, and benefit administration; Communication Portal, an employee engagement portal; BenefitStore, a solution for employees to avail various ancillary benefits; ACA Management and Reporting, a solution for employers to manage ACA compliance; Billing & Payment, an electronic invoice presentment and payment application; Consumer-Directed Healthcare Accounts, a solution for health savings accounts management; and consolidated omnibus budget reconciliation act administration solution. In addition, the company provides professional and customer support services, which include implementation services, such as discovery, configuration, deployment, integration, testing, training, and technical support; HR support services; and video library services. Further, it offers partner offerings, such as RedBrick Health that provides access to customizable health assessments, digital coaching, tracking, and challenges; LifeLock that allows employees to purchase identity theft protection; and SAP SuccessFactors that provides employee performance management solutions, as well as Certified Carrier Programs. The company was founded in 2000 and is headquartered in Charleston, South Carolina.

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