Head-To-Head Comparison: SPS Commerce (NASDAQ:SPSC) versus Acacia Research (NASDAQ:ACTG)

Acacia Research (NASDAQ:ACTG) and SPS Commerce (NASDAQ:SPSC) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, risk, analyst recommendations, earnings and profitability.

Valuation and Earnings

This table compares Acacia Research and SPS Commerce”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acacia Research	$285.23 million	1.59	$21.68 million	($0.18)	-26.11
SPS Commerce	$751.51 million	2.85	$93.34 million	$2.40	24.29

SPS Commerce has higher revenue and earnings than Acacia Research. Acacia Research is trading at a lower price-to-earnings ratio than SPS Commerce, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Acacia Research and SPS Commerce’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acacia Research	-8.53%	-2.81%	-2.11%
SPS Commerce	11.92%	12.43%	10.37%

Volatility and Risk

Acacia Research has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, SPS Commerce has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Acacia Research and SPS Commerce, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acacia Research	1	0	1	0	2.00
SPS Commerce	1	7	2	1	2.27

Acacia Research presently has a consensus price target of $6.00, indicating a potential upside of 27.66%. SPS Commerce has a consensus price target of $76.45, indicating a potential upside of 31.16%. Given SPS Commerce’s stronger consensus rating and higher probable upside, analysts plainly believe SPS Commerce is more favorable than Acacia Research.

Insider & Institutional Ownership

86.7% of Acacia Research shares are held by institutional investors. Comparatively, 99.0% of SPS Commerce shares are held by institutional investors. 1.7% of Acacia Research shares are held by company insiders. Comparatively, 0.6% of SPS Commerce shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

SPS Commerce beats Acacia Research on 14 of the 15 factors compared between the two stocks.

About Acacia Research

Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating businesses across the industrial, energy and technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process, and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management.

About SPS Commerce

SPS Commerce, Inc. provides cloud-based supply chain management solutions in the United States and internationally. It offers solutions through the SPS Commerce, a cloud-based platform that enhances the way retailers, grocers, suppliers, distributors, and logistics firms manage and fulfill omnichannel orders, optimize sell-through performance, and automate new trading relationships. The company also provides Fulfillment, an electronic data interchange solution that scales as a business grows, where companies use a single system to manage orders and logistics from various sales channels, including wholesale, eCommerce, and marketplaces; and Analytics product that enables organizations to enhance visibility into how products are selling through a single connection across various sales channels, including wholesale, eCommerce, and marketplaces, as well as enhances access and usage of sales and inventory data through a combination of analytics applications, network of connections, and industry-leading expertise. In addition, it offers various complimentary products, such as assortment product, which simplifies the communication of robust, accurate item data by automatically translating item attributes, and hierarchies; and community product that allows organizations to accelerate digitization of their supply chain and improve collaboration with suppliers through change management and onboarding programs. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.