Analyzing Mitek Systems (MITK) and GrubHub (GRUB)

Mitek Systems (NASDAQ: MITK) and GrubHub (NYSE:GRUB) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitability, institutional ownership, dividends and valuation.

Risk and Volatility

Mitek Systems has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, GrubHub has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Profitability

This table compares Mitek Systems and GrubHub’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mitek Systems 31.05% 11.49% 9.64%
GrubHub 9.60% 7.45% 6.07%

Valuation & Earnings

This table compares Mitek Systems and GrubHub’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mitek Systems $45.39 million 6.67 $14.09 million $0.38 22.90
GrubHub $493.33 million 12.70 $49.55 million $0.68 106.33

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Mitek Systems and GrubHub, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mitek Systems 0 0 4 0 3.00
GrubHub 1 9 13 0 2.52

Mitek Systems presently has a consensus price target of $10.75, indicating a potential upside of 23.56%. GrubHub has a consensus price target of $59.52, indicating a potential downside of 17.67%. Given Mitek Systems’ stronger consensus rating and higher possible upside, equities analysts plainly believe Mitek Systems is more favorable than GrubHub.

Insider & Institutional Ownership

43.6% of Mitek Systems shares are held by institutional investors. 8.5% of Mitek Systems shares are held by company insiders. Comparatively, 2.4% of GrubHub shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Mitek Systems Company Profile

Mitek Systems, Inc. develops, markets and sells mobile capture and identity verification software solutions for enterprise customers. The Company’s technology allows users to remotely deposit checks, open accounts, get insurance quotes, pay bills, as well as verify their identity by taking pictures of various documents with their camera-equipped smartphones and tablets instead of using the device keyboard. Its technology uses algorithms to correct image distortion, extract relevant data, route images to their desired location and process transactions. Its technology processes images of documents in various ways. The Company’s products include Mobile Verify, Mobile Fill, Mobile Docs, Mobile Deposit and Commercial Mobile Deposit Capture. Its mobile technology solutions are provided in two parts: a software development kit (SDK) for mobile capture, and a software platform for image correction, detection, extraction and authentication.

GrubHub Company Profile

Grubhub Inc. provides an online and mobile platform for restaurant pick-up and delivery orders. Its products include Grubhub and Seamless Mobile Applications and Mobile Website, Grubhub and Seamless Websites, Corporate Program, Delivery, Allmenus and MenuPages, Grubhub for Restaurants, and Restaurant Websites. As of December 31, 2016, the Company connected more than 50,000 local restaurants with diners in more than 1,100 cities across the United States. In certain markets, the Company also provides delivery services to restaurants on its platform that do not have their own delivery operations. The Company provides diners on the platform with a personalized platform that helps them search for local restaurants and then place an order from an Internet-connected device. It also provides diners with information about their orders and status. The Company also provides delivery services to restaurants on its platform that do not have their own delivery operations.

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