Gridsum (NASDAQ:GSUM) and Medical Transcription Billing (NASDAQ:MTBC) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.
Profitability
This table compares Gridsum and Medical Transcription Billing’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gridsum | N/A | N/A | N/A |
| Medical Transcription Billing | -6.22% | -10.79% | -8.52% |
Volatility and Risk
Gridsum has a beta of 2.72, indicating that its share price is 172% more volatile than the S&P 500. Comparatively, Medical Transcription Billing has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Gridsum and Medical Transcription Billing, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gridsum | 0 | 0 | 0 | 0 | N/A |
| Medical Transcription Billing | 0 | 0 | 2 | 0 | 3.00 |
Medical Transcription Billing has a consensus target price of $6.00, indicating a potential upside of 28.76%. Given Medical Transcription Billing’s higher probable upside, analysts clearly believe Medical Transcription Billing is more favorable than Gridsum.
Institutional and Insider Ownership
30.0% of Gridsum shares are held by institutional investors. Comparatively, 6.5% of Medical Transcription Billing shares are held by institutional investors. 50.5% of Medical Transcription Billing shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Gridsum and Medical Transcription Billing’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gridsum | $62.72 million | 1.26 | -$75.82 million | N/A | N/A |
| Medical Transcription Billing | $50.55 million | 1.11 | -$2.14 million | ($0.59) | -7.90 |
Medical Transcription Billing has lower revenue, but higher earnings than Gridsum.
Summary
Gridsum beats Medical Transcription Billing on 7 of the 11 factors compared between the two stocks.
About Gridsum
Gridsum Holding Inc. provides data analysis software for enterprises and government agencies in China. Its proprietary distributed data architecture allows its customers to collect and analyze information; and Gridsum Big Data platform and Gridsum Prophet performs multi-dimensional correlation analysis and analyzes complex real-time events. The company offers Web Dissector to analyze customer Websites by monitoring and analyzing key performance indicators; Mobile Dissector to understand mobile app user activity; SEM Dissector for search engine marketing; SEO Dissector, a search engine optimization tool; Ad Dissector, an advertisement performance monitoring and optimization product; Contribution Dissector to track and analyze user behavior from original access to ultimate conversion; Audience Dissector, an audience analysis product; and Recommendation Engine, a data driven content recommendation solution. It also provides Government Web Dissector, a digital intelligence solution; Government Website Group Integrated Management Platform, an integrated management platform; Streaming Dissector, a real-time viewership analysis for digital online video; Video Dissector, an online video content analytics tool; TV Dissector, an analytics tool; Rating Plus, a television viewing data analytics tool; and Media Dissector, a mass, social, and user-generated content media monitoring and analytics tool. In addition, the company offers Law Dissector, a search and statistical analysis tool; Smart Push, a legal research tool; voice recognition and transcription system; Information Dissector, an insightful analytical system; Social Listening, a cloud-based social listening solution; Gridsum Dashboard, a data visualization tool; and Gridsum Report Center, an automated report generation and distribution tool. Further, it develops new media analytics and information discovery solutions to address customer needs. The company was founded in 2005 and is headquartered in Beijing, China.
About Medical Transcription Billing
Medical Transcription Billing, Corp. is a healthcare information technology company that provides an integrated suite of Web-based solutions, together with related business services, to healthcare providers practicing in ambulatory care settings. The Company’s offering, PracticePro, allows healthcare practices with the core software and business services on Software-as-a-Service (SaaS) platform. PracticePro includes practice management software and related tools, which facilitate the day-to-day operation of a medical practice; electronic health records (EHR), which allow its customers to qualify for government incentives; revenue cycle management (RCM) services, which include medical billing, analytics and related services, and mobile Health (mHealth) solutions, including smartphone applications that assist patients and healthcare providers in the provision of healthcare services. The Company offers a clearinghouse service, which allows clients to track claim status.
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