Magic Software Enterprises (NASDAQ:MGIC – Get Free Report) and OptimizeRx (NASDAQ:OPRX – Get Free Report) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.
Valuation & Earnings
This table compares Magic Software Enterprises and OptimizeRx”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Magic Software Enterprises | $603.22 million | 1.41 | $36.88 million | $0.81 | 21.46 |
| OptimizeRx | $109.43 million | 1.17 | $5.13 million | $0.26 | 26.15 |
Analyst Ratings
This is a breakdown of recent ratings for Magic Software Enterprises and OptimizeRx, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Magic Software Enterprises | 0 | 2 | 1 | 0 | 2.33 |
| OptimizeRx | 1 | 1 | 6 | 1 | 2.78 |
Magic Software Enterprises presently has a consensus price target of $18.00, indicating a potential upside of 3.57%. OptimizeRx has a consensus price target of $17.57, indicating a potential upside of 158.40%. Given OptimizeRx’s stronger consensus rating and higher probable upside, analysts plainly believe OptimizeRx is more favorable than Magic Software Enterprises.
Profitability
This table compares Magic Software Enterprises and OptimizeRx’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Magic Software Enterprises | 6.61% | 16.28% | 8.96% |
| OptimizeRx | 4.69% | 10.61% | 7.54% |
Institutional and Insider Ownership
24.7% of Magic Software Enterprises shares are owned by institutional investors. Comparatively, 76.5% of OptimizeRx shares are owned by institutional investors. 4.5% of Magic Software Enterprises shares are owned by company insiders. Comparatively, 5.6% of OptimizeRx shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Volatility and Risk
Magic Software Enterprises has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, OptimizeRx has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.
Summary
OptimizeRx beats Magic Software Enterprises on 8 of the 15 factors compared between the two stocks.
About Magic Software Enterprises
Magic Software Enterprises Ltd. provides proprietary application development, vertical software solutions, business process integration, information technologies (IT) outsourcing software services, and cloud-based services in Israel and internationally. Its Software Services segment develops, markets, sells, and supports application platform, software applications, and business and process integration solutions and related services. The company’s IT Professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental outsourcing services. It also offers proprietary application platforms, such as Magic xpa for developing and deploying business applications; AppBuilder for building, deploying, and maintaining business applications; Magic xpi for application integration; Magic xpi cloud native; FactoryEye for virtualization of production data; Magic Data Management and Analytics Platform for data management; and Magic SmartUX for cross-platform mobile business applications. The company also provides vertical software solutions comprising Clicks, a software solution for healthcare providers; Leap, a software solution for business support systems; Hermes Cargo, a packaged software solution for managing air cargo ground handling; HR Pulse, a single-tenant software as a service tool; MBS Solution, a system for managing TV broadcast management; Nativ, a system for management of rehabilitation centers; and Mobisale, a system for sales and distribution field activities for consumer goods manufacturers and wholesalers. In addition, It provides software maintenance, support, training, and consulting services. The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. The company was incorporated in 1983 and is headquartered in Or Yehuda, Israel.
About OptimizeRx
OptimizeRx Corporation, a digital health technology company, enables care-focused engagement between life sciences organizations, healthcare providers, and patients at critical junctures throughout the patient care journey. It offers various tech-enabled marketing solutions through its Artificial Intelligence-generated Dynamic Audience and Activation Platform, which enables customers to execute traditional marketing campaigns on its proprietary digital point-of-care network, as well as dynamic marketing campaigns that optimize audiences in real time to increase the value of treatment information for healthcare professionals and patients in response to clinical care events. The company was founded in 2006 and is based in Waltham, Massachusetts.
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