Critical Comparison: Automatic Data Processing (NASDAQ:ADP) & Fiverr International (NYSE:FVRR)

Fiverr International (NYSE:FVRR) and Automatic Data Processing (NASDAQ:ADP) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Volatility and Risk

Fiverr International has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500. Comparatively, Automatic Data Processing has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Fiverr International and Automatic Data Processing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fiverr International	6.42%	13.54%	8.36%
Automatic Data Processing	20.33%	77.01%	6.67%

Insider & Institutional Ownership

59.0% of Fiverr International shares are owned by institutional investors. Comparatively, 80.0% of Automatic Data Processing shares are owned by institutional investors. 15.9% of Fiverr International shares are owned by company insiders. Comparatively, 0.2% of Automatic Data Processing shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for Fiverr International and Automatic Data Processing, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fiverr International	1	11	0	0	1.92
Automatic Data Processing	2	9	3	0	2.07

Fiverr International presently has a consensus price target of $11.06, suggesting a potential upside of 31.62%. Automatic Data Processing has a consensus price target of $285.00, suggesting a potential downside of 5.02%. Given Fiverr International’s higher possible upside, analysts clearly believe Fiverr International is more favorable than Automatic Data Processing.

Valuation & Earnings

This table compares Fiverr International and Automatic Data Processing”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fiverr International	$430.91 million	0.70	$20.98 million	$0.69	12.18
Automatic Data Processing	$21.95 billion	5.40	$4.41 billion	$11.28	26.60

Automatic Data Processing has higher revenue and earnings than Fiverr International. Fiverr International is trading at a lower price-to-earnings ratio than Automatic Data Processing, indicating that it is currently the more affordable of the two stocks.

Summary

Automatic Data Processing beats Fiverr International on 10 of the 14 factors compared between the two stocks.

About Fiverr International

Fiverr International Ltd. operates an online marketplace worldwide. Its platform enables sellers to sell their services and buyers to buy them. The company's platform includes various categories in ten verticals, including graphic and design, digital marketing, writing and translation, video and animation, music and audio, programming and tech, business, data, lifestyle, and photography. It also offers value-added products, including subscription-based content marketing, back-office, learning and development offerings, creative talent, and freelancer management platforms. In addition, the company provides a suite of professional solutions that enable businesses to engage with freelancers; Fiverr Pro, a marketplace; Fiverr Certified, a storefront to access certified experts for partner vendors; Fiverr Enterprise, a gateway to source and manage on-demand and long-term freelancers. Further, it offers various value-added products, including Promoted Gigs which allows sellers to advertise their services on the platform; and Seller Plus, a subscription program that equips sellers with advanced tools. The company's buyers include businesses of various sizes, as well as sellers comprise a group of freelancers and agencies. Fiverr International Ltd. was incorporated in 2010 and is headquartered in Tel Aviv, Israel.

About Automatic Data Processing

Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. Its offerings include payroll services, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services, as well as integrated HCM solutions. The PEO Services segment provides HR outsourcing solution to businesses through a co-employment model. This segment offers employee benefits, protection and compliance, talent engagement, expertise, comprehensive outsourcing, and recruitment process outsourcing services. Automatic Data Processing, Inc. was founded in 1949 and is headquartered in Roseland, New Jersey.