Financial Analysis: Rubicon Project (RUBI) & Model N (MODN)

Rubicon Project (NYSE: RUBI) and Model N (NYSE:MODN) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Institutional and Insider Ownership

58.2% of Rubicon Project shares are owned by institutional investors. Comparatively, 62.2% of Model N shares are owned by institutional investors. 13.8% of Rubicon Project shares are owned by company insiders. Comparatively, 18.9% of Model N shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Rubicon Project and Model N, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rubicon Project 0 4 2 0 2.33
Model N 0 2 3 0 2.60

Rubicon Project presently has a consensus target price of $4.00, indicating a potential upside of 62.60%. Model N has a consensus target price of $18.67, indicating a potential upside of 3.99%. Given Rubicon Project’s higher probable upside, equities analysts clearly believe Rubicon Project is more favorable than Model N.

Valuation and Earnings

This table compares Rubicon Project and Model N’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rubicon Project $155.54 million 0.80 -$154.78 million ($1.11) -2.22
Model N $131.17 million 4.18 -$39.54 million ($0.83) -21.63

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

Risk & Volatility

Rubicon Project has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Model N has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Profitability

This table compares Rubicon Project and Model N’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rubicon Project -124.07% -31.99% -16.09%
Model N -19.31% -41.62% -10.13%

Summary

Model N beats Rubicon Project on 9 of the 14 factors compared between the two stocks.

Rubicon Project Company Profile

The Rubicon Project, Inc. provides technology solutions to automate the purchase and sale of digital advertising inventory for buyers and sellers in the United States and internationally. It offers applications and services for digital advertising inventory sellers, including Websites, mobile applications, and other digital media properties, to sell their advertising inventory; applications and services for buyers, such as advertisers, agencies, agency trading desks, and demand side platforms, to buy advertising inventory; and a marketplace over which such transactions are executed. The Rubicon Project, Inc. was founded in 2007 and is headquartered in Los Angeles, California.

Model N Company Profile

Model N, Inc. provides revenue management cloud solutions for the life sciences, technology, and manufacturing companies. The company's cloud-based revenue management solutions include Revenue Cloud for Pharma, Revenue Cloud for Med Tech, Revenue Cloud for High Tech, and Revenue Cloud. It develops software applications, such as managed care and government pricing for life science companies; and channel incentives for technology companies. The company also offers revenue management processes, such as pricing, contracting, rebates, incentives, channel management, and regulatory compliance. In addition, Model N, Inc. provides implementation, managed, strategic, and customer support services. It primarily serves large and mid-sized organizations worldwide through its direct sales force. Model N, Inc. was founded in 1999 and is headquartered in San Mateo, California, with additional offices in the United States, India, and Switzerland.

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