Reviewing Rapid7 (NASDAQ:RPD) and MeridianLink (NYSE:MLNK)

MeridianLink (NYSE:MLNK) and Rapid7 (NASDAQ:RPD) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Volatility and Risk

MeridianLink has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Rapid7 has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Insider and Institutional Ownership

82.7% of MeridianLink shares are held by institutional investors. Comparatively, 95.7% of Rapid7 shares are held by institutional investors. 21.3% of MeridianLink shares are held by insiders. Comparatively, 2.6% of Rapid7 shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares MeridianLink and Rapid7″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MeridianLink	$311.44 million	4.75	-$42.54 million	($0.67)	-29.22
Rapid7	$833.01 million	2.97	-$149.26 million	$0.63	62.03

MeridianLink has higher earnings, but lower revenue than Rapid7. MeridianLink is trading at a lower price-to-earnings ratio than Rapid7, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for MeridianLink and Rapid7, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MeridianLink	1	4	2	0	2.14
Rapid7	0	14	6	0	2.30

MeridianLink currently has a consensus price target of $22.90, indicating a potential upside of 16.96%. Rapid7 has a consensus price target of $44.59, indicating a potential upside of 14.09%. Given MeridianLink’s higher probable upside, equities research analysts plainly believe MeridianLink is more favorable than Rapid7.

Profitability

This table compares MeridianLink and Rapid7’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MeridianLink	-16.57%	-9.57%	-4.47%
Rapid7	5.65%	-128.95%	5.58%

Summary

Rapid7 beats MeridianLink on 8 of the 14 factors compared between the two stocks.

About MeridianLink

MeridianLink, Inc., a software and services company, provides software solutions for banks, credit unions, mortgage lenders, specialty lending providers, and consumer reporting agencies in the United States. The company offers MeridianLink One, a multi-product platform that can be tailored to meet the needs of customers as they digitally transform their organizations and adapt to changing business and consumer demands; MeridianLink Portal, a Point of Sale system that allows financial institutions to expand existing lending and deposit account; MeridianLink Opening, a cloud-based online account opening and deposit software solution; MeridianLink Consumer, a full loan solution suite to banks and credit unions; and MeridianLink DecisionLender, a loan origination software (LOS) for finance companies. It also provides MeridianLink Mortgage, a cloud-based software designed for financial professionals to optimize the end-to-end mortgage loan origination process; MeridianLink Collect, a web-based debt collection software; Mortgage Credit Link, a web-based order fulfillment hub; and MeridianLink Business, a cloud-based platform that offers business lending solutions for banks and credit unions. In addition, the company provides analytics and business intelligence tools through MeridianLink Engage, MeridianLink Consulting, MeridianLink Data Connect, and MeridianLink Insight; Data Verification Software Solution, a cloud-based order fulfillment hub for bankers and credit officers; and loan origination systems, other credit decisioning tools, and additional solution modules. MeridianLink, Inc. was founded in 1998 and is headquartered in Costa Mesa, California.

About Rapid7

Rapid7, Inc. provides cybersecurity solutions under the Rapid7, Nexpose, and Metasploit brand names. The company offers endpoint to cloud data collection and sharing applications, such as Rapid7 Insight Agent, a software-based agent that is used on assets across on-premises and cloud environments to centralize and monitor data on company's platform; Rapid7 Insight Network Sensor that analyzes raw end-to-end network traffic to increase visibility into user activity, pinpoint real threats, and investigations; Rapid7 Cloud Event Data Harvesting that offers visibility into changes made to cloud resources; and third-party integrations and ecosystem, as well as orchestration and automation solutions. It also offers various platforms, including Rapid7 managed threat complete consisting of managed detection response that delivers end-to-end threat detection and response, as well as offloads day-to-day vulnerability management operations. In addition, it provides Rapid7 threat complete consisting of InsightIDR, a security information and event management, and extended detection and response solution; and InsightVM, a vulnerability management solution that provides visibility across on-premise and remote endpoints for security teams to evaluate the business risks, and configurations, and share with their IT counterparts for remediation. Further, the company offers Rapid7 cloud risk complete, which includes InsightCloudSec, a cloud risk and compliance management solution; and InsightAppSec, a dynamic application security testing tool. It also provides professional services. It serves a range of industries, including business services, pharmaceuticals, technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, travel and transportation, government, online services, telecommunications, and professional services. The company was incorporated in 2000 and is headquartered in Boston, Massachusetts.