Critical Analysis: IMS Health (IMS) & PFSweb (PFSW)

IMS Health (NYSE: IMS) and PFSweb (NASDAQ:PFSW) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Insider and Institutional Ownership

90.3% of IMS Health shares are owned by institutional investors. Comparatively, 58.3% of PFSweb shares are owned by institutional investors. 2.5% of IMS Health shares are owned by company insiders. Comparatively, 5.2% of PFSweb shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares IMS Health and PFSweb’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IMS Health N/A N/A N/A $0.42 74.62
PFSweb $334.64 million 0.44 -$7.53 million ($0.60) -12.95

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

Analyst Ratings

This is a summary of current recommendations for IMS Health and PFSweb, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IMS Health 0 0 0 0 N/A
PFSweb 0 2 4 0 2.67

PFSweb has a consensus target price of $10.70, indicating a potential upside of 37.71%. Given PFSweb’s higher possible upside, analysts clearly believe PFSweb is more favorable than IMS Health.

Profitability

This table compares IMS Health and PFSweb’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IMS Health 2.99% 5.62% 1.22%
PFSweb -3.30% 1.98% 0.40%

Summary

IMS Health beats PFSweb on 6 of the 10 factors compared between the two stocks.

IMS Health Company Profile

IMS Health Holdings, Inc. (IMS) is an information and technology services company that provides solutions to its clients in the healthcare industry. The Company has its presence in over 100 countries. The Company’s data set contains over 10 petabytes of data and over 500 million patient records. It serves healthcare organizations and life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. The Company’s principal information offerings include national information offerings, sub-national information offerings and OneKey. Its technology services offerings include technology solutions, real-world evidence solutions, and workflow analytics and consulting services. It offers technology services that include data warehousing, information technology (IT) outsourcing, software applications and other services.

PFSweb Company Profile

PFSWEB, Inc. is a global provider of omni-channel commerce solutions, including a range of technology, infrastructure and professional services. The Company’s service offerings include Website design, creation and integration, digital agency and marketing, e-commerce technologies, order management, customer care, logistics and fulfillment, financial management and professional consulting. It operates through two segments: PFSweb, and Business and Retail Connect. PFSweb is a global provider of various infrastructure, technology and digital agency solutions and operates as a service fee business. In the Business and Retail Connect segment, subsidiaries of the Company purchase inventory from clients and resell the inventory to client customers. Its solutions support direct-to-consumer (DTC), business-to-business (B2B) and retail sales channels. It markets its solutions as PFSweb’s End2End eCommerce solution.

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