Financial Analysis: Vertex (NASDAQ:VERX) versus Backblaze (NASDAQ:BLZE)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Backblaze and Vertex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Backblaze	1	0	6	1	2.88
Vertex	1	5	12	0	2.61

Backblaze currently has a consensus price target of $9.33, indicating a potential upside of 102.90%. Vertex has a consensus price target of $32.60, indicating a potential upside of 70.50%. Given Backblaze’s stronger consensus rating and higher probable upside, research analysts clearly believe Backblaze is more favorable than Vertex.

Risk and Volatility

Backblaze has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Vertex has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Earnings & Valuation

This table compares Backblaze and Vertex”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Backblaze	$127.63 million	2.08	-$48.53 million	($0.67)	-6.87
Vertex	$666.78 million	4.57	-$52.73 million	($0.35)	-54.63

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

Profitability

This table compares Backblaze and Vertex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Backblaze	-24.37%	-36.40%	-16.15%
Vertex	-7.32%	26.84%	5.05%

Insider & Institutional Ownership

54.0% of Backblaze shares are held by institutional investors. Comparatively, 70.3% of Vertex shares are held by institutional investors. 5.2% of Backblaze shares are held by company insiders. Comparatively, 43.3% of Vertex shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Vertex beats Backblaze on 9 of the 14 factors compared between the two stocks.

About Backblaze

Backblaze, Inc., a storage cloud platform, provides businesses and consumers cloud services to store, use, and protect data in the United States and internationally. The company offers cloud services through a web-scale software infrastructure built on commodity hardware. It also provides Backblaze B2 Cloud Storage, which enables customers to store data, developers to build applications, and partners to expand their use cases. This service is offered as a consumption-based Infrastructure-as-a-Service (IaaS) and serves use cases, such as public, hybrid, and multi-cloud data storage; application development and DevOps; content delivery and edge computing; security and ransomware protection; media management; backup, archive, and tape replacement; repository for analytics, artificial intelligence and machine learning; and Internet of Things. In addition, the company offers Backblaze Computer Backup that automatically backs up data from laptops and desktops for businesses and individuals, which provides a subscription-based Software-as-a-Service and serves use cases, including computer backup, ransomware protection, theft and loss protection, and remote access. It serves the public cloud IaaS storage and Data-Protection-as-a-Service markets. The company was incorporated in 2007 and is headquartered in San Mateo, California.

About Vertex

Vertex, Inc., together with its subsidiaries, provides enterprise tax technology solutions for retail trade, wholesale trade, and manufacturing industries in the United States and internationally. The company offers tax determination; compliance and reporting, including workflow management tools, role-based security, and event logging; tax data management; document management; analytics and insights; pre-built integration that includes mapping data fields, and business logic and configurations; industry-specific solutions; and technology specific solutions, such as chain flow accelerator and SAP-specific tools. It provides implementation services, such as configuration, data migration and implementation, and support and training; and managed services, including tax return preparation, filing and tax payment, and notice management. The company sells its software products through software licenses and software as a service subscription. Vertex, Inc. was founded in 1978 and is headquartered in King of Prussia, Pennsylvania.