Financial Analysis: Professional Diversity Network (NASDAQ:IPDN) & First Advantage (NYSE:FA)

First Advantage (NYSE:FA) and Professional Diversity Network (NASDAQ:IPDN) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Institutional and Insider Ownership

94.9% of First Advantage shares are owned by institutional investors. Comparatively, 27.8% of Professional Diversity Network shares are owned by institutional investors. 4.4% of First Advantage shares are owned by company insiders. Comparatively, 0.4% of Professional Diversity Network 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 & Risk

First Advantage has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Professional Diversity Network has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for First Advantage and Professional Diversity Network, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Advantage	0	4	3	0	2.43
Professional Diversity Network	1	0	0	0	1.00

First Advantage presently has a consensus price target of $24.57, indicating a potential upside of 4.43%. Given First Advantage’s stronger consensus rating and higher probable upside, analysts plainly believe First Advantage is more favorable than Professional Diversity Network.

Profitability

This table compares First Advantage and Professional Diversity Network’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Advantage	0.65%	13.16%	7.33%
Professional Diversity Network	-143.98%	-76.40%	-54.04%

Earnings and Valuation

This table compares First Advantage and Professional Diversity Network”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Advantage	$1.72 billion	2.35	$37.29 million	$0.14	168.07
Professional Diversity Network	$6.55 million	0.14	-$6.45 million	($51.05)	-0.03

First Advantage has higher revenue and earnings than Professional Diversity Network. Professional Diversity Network is trading at a lower price-to-earnings ratio than First Advantage, indicating that it is currently the more affordable of the two stocks.

Summary

First Advantage beats Professional Diversity Network on 13 of the 14 factors compared between the two stocks.

About First Advantage

First Advantage Corporation provides employment background screening, identity, and verification solutions worldwide. It offers pre-onboarding products and solutions, such as criminal background checks, drug/health screening, extended workforce screening, FBI channeling, identity checks and biometric fraud mitigation tools, education/work history verification, driver records and compliance, healthcare credentials, executive screening, and other screening products. The company also provides post-onboarding solutions, including criminal records monitoring, healthcare sanctions, motor vehicle records, social media screening, and global sanctions and licenses; and other products comprising fleet/vehicle compliance, hiring tax credits and incentives, resident/tenant screening, and investigative research. Its products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security in global enterprises, mid-sized, and small companies. The company was formerly known as Fastball Intermediate, Inc. and changed its name to First Advantage Corporation in March 2021. First Advantage Corporation was founded in 2002 and is based in Atlanta, Georgia.

About Professional Diversity Network

Professional Diversity Network, Inc. operates online professional networking communities with career resources in the United States. It operates through three segments: Professional Diversity Network (PDN Network), National Association of Professional Women (NAPW Network), and RemoteMore USA (RemoteMore). The company offers online professional job seeking communities that offers recruitment services, such as single and multiple job postings, recruitment media, talent recruitment communities, corporate memberships, hiring campaign marketing and advertising, e-newsletter marketing, and research and outreach services to various cultural groups and employers. It also provides consumer advertising and consumer marketing solutions through advertising and job postings on its websites; and contracted software development services. In addition, the company operates a women-only professional networking organization; and offers companies with talented engineers to provide solutions to their software needs. Professional Diversity Network, Inc. was incorporated in 2003 and is headquartered in Chicago, Illinois.