Critical Analysis: eGain (NASDAQ:EGAN) & Workiva (NYSE:WK)

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

Risk and Volatility

Workiva has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, eGain has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500.

Insider & Institutional Ownership

92.2% of Workiva shares are owned by institutional investors. Comparatively, 53.9% of eGain shares are owned by institutional investors. 3.9% of Workiva shares are owned by company insiders. Comparatively, 34.3% of eGain shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Workiva and eGain’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Workiva	-13.23%	N/A	-6.99%
eGain	8.38%	12.28%	6.27%

Analyst Ratings

This is a summary of recent recommendations for Workiva and eGain, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Workiva	0	1	5	0	2.83
eGain	0	1	1	0	2.50

Workiva currently has a consensus price target of $95.00, suggesting a potential upside of 19.26%. eGain has a consensus price target of $9.50, suggesting a potential upside of 94.67%. Given eGain’s higher probable upside, analysts clearly believe eGain is more favorable than Workiva.

Valuation and Earnings

This table compares Workiva and eGain”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Workiva	$678.00 million	6.44	-$127.53 million	($1.72)	-46.31
eGain	$92.80 million	1.57	$7.78 million	$0.28	17.43

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

Summary

eGain beats Workiva on 8 of the 14 factors compared between the two stocks.

About Workiva

Workiva Inc., together with its subsidiaries, provides cloud-based reporting solutions in the United States and internationally. The company offers Workiva platform, a multi-tenant cloud software that provides data linking capabilities; audit trail services; administrators access management; and allows customers to connect data from multiple enterprise resource planning, human capital management, and customer relationship management systems, as well as other third-party cloud and on-premise applications. It serves public and private companies, government agencies, and higher-education institutions. Workiva Inc. was founded in 2008 and is headquartered in Ames, Iowa.

About eGain

eGain Corporation develops, licenses, implements, and supports customer service infrastructure software solutions in North America, Europe, the Middle East, Africa, and the Asia Pacific. It provides eGain Knowledge Hub, which helps businesses to centralize knowledge, policies, procedures, situational expertise, best-practices, while delivering guided, and personalized solutions to customers and agents; eGain Conversation Hub for digital-first, omnichannel interaction management within a modern, purpose-built desktop; and eGain Analytics Hub enables clients to measure, manage, and optimize omnichannel service operations and knowledge. The company also offers subscription services that provides customers with access to its software on a cloud-based platform; and professional services, such as consulting and implementation, training, and managed services. It serves customers in various industry sectors, including the financial services, telecommunications, retail, government, healthcare, and utilities. The company was incorporated in 1997 and is headquartered in Sunnyvale, California.