Critical Review: American Software (AMSWA) & Imprivata (IMPR)

American Software (NASDAQ: AMSWA) and Imprivata (NYSE:IMPR) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.

Dividends

American Software pays an annual dividend of $0.44 per share and has a dividend yield of 3.7%. Imprivata does not pay a dividend. American Software pays out 74.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and price targets for American Software and Imprivata, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Software 0 0 1 0 3.00
Imprivata 0 0 0 0 N/A

American Software currently has a consensus target price of $14.00, suggesting a potential upside of 16.67%.

Profitability

This table compares American Software and Imprivata’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Software 16.73% 17.27% 12.22%
Imprivata -17.22% -58.85% -22.17%

Earnings and Valuation

This table compares American Software and Imprivata’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Software $106.29 million 3.40 $14.62 million $0.59 20.34
Imprivata N/A N/A N/A ($0.95) N/A

American Software has higher revenue and earnings than Imprivata. Imprivata is trading at a lower price-to-earnings ratio than American Software, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

74.6% of American Software shares are owned by institutional investors. Comparatively, 59.3% of Imprivata shares are owned by institutional investors. 13.9% of American Software shares are owned by insiders. Comparatively, 40.2% of Imprivata shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

American Software beats Imprivata on 9 of the 11 factors compared between the two stocks.

About American Software

American Software, Inc. (American Software) develops, markets and supports a portfolio of software and services that delivers enterprise management, supply chain and retail planning solutions to the marketplace. The Company operates through three business segments: Supply Chain Management (SCM), Enterprise Resource Planning (ERP) and Information Technology (IT) Consulting. The SCM segment consists of Logility, Inc. and its subsidiary, Demand Management, Inc. (DMI), both of which provide supply chain and retail planning solutions to trading partners. The ERP segment consist of American Software ERP, which provides business software for manufacturers and distributors, and New Generation Computing, Inc. (NGC), which provides industry-specific business software to both retailers and manufacturers in the apparel, footwear, sewn products and furniture industries. The IT Consulting segment consists of The Proven Method, Inc., an IT staffing and consulting services firm.

About Imprivata

Imprivata, Inc. (Imprivata) is a United States-based healthcare information technology security company. The Company enables healthcare organizations to access, communicate and transact patient information securely. The Company offers Imprivata OneSign, Imprivata Cortext, Imprivata Confirm ID and Imprivata PatientSecure. Imprivata OneSign provides single sign-on, authentication management and virtual desktop roaming, enabling No Click Access to clinical applications and patient information, anytime, anywhere and from any device. Imprivata Cortext enables clinicians to collaborate across care teams and organizations. Imprivata Confirm ID is an identity and two-factor authentication platform for remote access, electronic prescriptions for controlled substances (EPCS), medical device access and other clinical authentication workflows. Imprivata PatientSecure is a patient identification solution that uses palm vein recognition biometrics to identify patients at any point of entry to care.

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