Upwork (NASDAQ:UPWK) versus HireQuest (NASDAQ:HQI) Critical Analysis

HireQuest (NASDAQ:HQI) and Upwork (NASDAQ:UPWK) are both small-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Institutional & Insider Ownership

12.0% of HireQuest shares are owned by institutional investors. Comparatively, 77.7% of Upwork shares are owned by institutional investors. 42.9% of HireQuest shares are owned by insiders. Comparatively, 4.9% of Upwork shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for HireQuest and Upwork, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HireQuest	0	1	2	0	2.67
Upwork	1	9	3	0	2.15

HireQuest presently has a consensus target price of $19.00, indicating a potential upside of 10.95%. Upwork has a consensus target price of $13.05, indicating a potential upside of 44.28%. Given Upwork’s higher possible upside, analysts clearly believe Upwork is more favorable than HireQuest.

Profitability

This table compares HireQuest and Upwork’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HireQuest	27.06%	16.35%	12.11%
Upwork	12.94%	16.70%	7.94%

Risk & Volatility

HireQuest has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Upwork has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Earnings and Valuation

This table compares HireQuest and Upwork”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HireQuest	$30.15 million	7.89	$6.33 million	$0.57	30.04
Upwork	$787.28 million	1.43	$115.43 million	$0.77	11.75

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

About HireQuest

HireQuest, Inc. provides temporary staffing services in the United States. It offers staffing services, including direct-dispatch, executive search, consultant, unskilled and semi-skilled industrial and construction personnel, clerical and administrative personnel, and permanent placement services, as well as commercial and non-CDL drivers, and skilled personnel in the medical and dental industries. The company provides its services under the HireQuest Direct, HireQuest, SNelling, DriverQuest, HireQuest Health, Northbound Executive Search, and MRI trade names. It serves construction, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, and retail industries, as well as dental practices. HireQuest, Inc. was founded in 2002 and is headquartered in Goose Creek, South Carolina.

About Upwork

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally. The company’s work marketplace provides access to talent with various skills across a range of categories, including administrative support, sales and marketing, design and creative, and customer service, as well as web, mobile, and software development. Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. The company’s work marketplace offers access to various functionalities for remote engagements with talent, including communication and collaboration, ability to receive talent invoices through their work marketplace, and payment protection. Its marketplace offerings include Upwork Payroll and Upwork Enterprise, as well as managed and escrow services. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in San Francisco, California.