PDF Solutions (PDFS) and PROS (PRO) Critical Review

PDF Solutions (NASDAQ: PDFS) and PROS (NYSE:PRO) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Risk & Volatility

PDF Solutions has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, PROS has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Insider & Institutional Ownership

86.8% of PDF Solutions shares are held by institutional investors. 14.7% of PDF Solutions shares are held by company insiders. Comparatively, 15.4% of PROS shares are held 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 PDF Solutions and PROS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PDF Solutions -2.23% -1.14% -1.01%
PROS -43.36% N/A -14.73%

Earnings and Valuation

This table compares PDF Solutions and PROS’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PDF Solutions $101.87 million 3.73 -$1.33 million ($0.04) -297.25
PROS $168.82 million 6.86 -$77.92 million ($1.53) -23.22

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

Analyst Ratings

This is a summary of current recommendations and price targets for PDF Solutions and PROS, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PDF Solutions 0 1 2 0 2.67
PROS 0 2 4 1 2.86

PDF Solutions presently has a consensus price target of $22.00, suggesting a potential upside of 85.03%. PROS has a consensus price target of $35.33, suggesting a potential downside of 0.55%. Given PDF Solutions’ higher probable upside, research analysts clearly believe PDF Solutions is more favorable than PROS.

Summary

PROS beats PDF Solutions on 8 of the 15 factors compared between the two stocks.

About PDF Solutions

PDF Solutions, Inc. provides infrastructure technologies and services to enhance yield and optimize performance of integrated circuits (IC) in the United States, Germany, Taiwan, China, and internationally. It offers manufacturing process solutions; volume manufacturing solutions; design-for-inspection (DFI) solutions; and design-for-manufacturability (DFM) solutions. The company also provides Characterization Vehicle (CV) infrastructure, which includes CV test chips, pdCV analysis software, and pdFasTest electrical testers; DFI infrastructure that comprises DFI on-chip instruments, eProbe contactless E-beam tool, and Exensio ?char DFI software; FIRE software, which analyzes an IC design to compute its systematic and random yield loss; and Template technology that includes Templatyzer software and IP for identifying and developing a set of layout patterns. In addition, it offers Exensio enterprise-wide platform, which consists of Exensio-Yield that collects, loads, and stores yield data in an analysis-ready database, which enables product engineers to identify and analyze production yield, performance, reliability, and other issues; Exensio-Control, which provides fault detection and classification capabilities for monitoring, alarming, and controlling manufacturing tool sets; Exensio-Test that offers testing and analysis capability; and Exensio-Char, which encapsulates test structure analysis functionality of electrical and in-line inspection data from CV test chips and DFI on-chip instruments. The company sells its technologies and services through direct sales force, solution implementation teams, and strategic alliances to integrated device manufacturers, fabless semiconductor design companies, and foundries in the microprocessors, memory, graphics, image sensor solutions, and communications segments. PDF Solutions, Inc. was founded in 1992 and is headquartered in San Jose, California.

About PROS

PROS Holdings, Inc., a cloud software company, provides solutions for companies to price, configure, and sell their products and services to their customers. The company offers SellingPRO solutions, which include configuration, quoting, and e-commerce capabilities with data science; and PricingPRO solutions that deliver insight into pricing practices and provides pricing recommendations, as well as enhances control over pricing execution. It also provides RevenuePRO solutions that offer a set of integrated software solutions that enable enterprises in the travel industry, including the airline, hotel, and cruise industries to drive revenue and profit-maximizing business strategies through the application of forecasting, optimization technologies, and decision-support capabilities consisting of RevenuePRO Passenger Revenue Management, RevenuePRO Group Sales Optimizer, RevenuePRO Real-Time Dynamic Pricing, RevenuePRO Shopping, and RevenuePRO Merchandising. In addition, the company offers implementation and configuration, consulting, training, and maintenance and support; and strategic services, including discovery and insight consulting services, as well as software-as-a-service and cloud-based services. It serves manufacturing, distribution, and services industries, including automotive and industrial, B2B services, cargo, chemicals and energy, consumer goods, insurance, food and beverage, healthcare, high tech, and travel industries in the United States, Europe, and internationally. The company markets and sells its software solutions primarily through its direct global sales force, as well as indirectly through resellers and systems integrators. PROS Holdings, Inc. was founded in 1985 and is headquartered in Houston, Texas.

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