Critical Contrast: Rimini Street (NASDAQ:RMNI) versus Grid Dynamics (NASDAQ:GDYN)

Rimini Street (NASDAQ:RMNI) and Grid Dynamics (NASDAQ:GDYN) are both small-cap technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares Rimini Street and Grid Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rimini Street	1.69%	-53.91%	3.24%
Grid Dynamics	0.68%	1.90%	1.66%

Risk and Volatility

Rimini Street has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Grid Dynamics has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Rimini Street and Grid Dynamics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rimini Street	0	3	3	0	2.50
Grid Dynamics	2	1	4	1	2.50

Rimini Street presently has a consensus target price of $6.33, suggesting a potential upside of 50.08%. Grid Dynamics has a consensus target price of $9.40, suggesting a potential upside of 21.29%. Given Rimini Street’s higher possible upside, equities analysts plainly believe Rimini Street is more favorable than Grid Dynamics.

Valuation and Earnings

This table compares Rimini Street and Grid Dynamics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rimini Street	$421.54 million	0.93	$37.10 million	$0.08	52.75
Grid Dynamics	$411.83 million	1.53	$9.67 million	$0.02	387.50

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

Institutional & Insider Ownership

73.8% of Rimini Street shares are held by institutional investors. Comparatively, 71.2% of Grid Dynamics shares are held by institutional investors. 42.0% of Rimini Street shares are held by insiders. Comparatively, 6.5% of Grid Dynamics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Rimini Street beats Grid Dynamics on 9 of the 14 factors compared between the two stocks.

About Rimini Street

Rimini Street, Inc. provides enterprise software products, services, and support. The company engages in the provision of support services for Oracle and SAP enterprise software products. It also provides Rimini ONE, an outsourcing option that offers a set of unified and integrated services to run, manage, support, customize, configure, connect, protect, monitor, and optimize its clients’ application, database, and technology enterprise software; Rimini Support, a mission-critical support for Oracle, SAP, proprietary and open-source database, and technology software; Rimini Manage, a suite of managed services for application and database software; Rimini Protect, a suite of personalized software security services and solutions; and Rimini Connect, a suite of managed interoperability solutions for browsers, operating systems, and email systems. In addition, the company offers Rimini Watch, a suite of observability solutions that include monitoring and system health check solutions; Rimini Consult, a suite of professional services for clients’ enterprise software customization, configuration, implementation, integration, interoperability, migration, staff augmentation, and other project needs; and Rimini Custom, a program that expands support and related services to a broader portfolio of enterprise software. The company serves Fortune 500 companies and Fortune Global 100 companies across various industries. It sells its solutions primarily through direct sales organizations in North America, Latin America, Europe, Africa, the Middle East, Asia, and the Asia-Pacific. The company was incorporated in 2005 and is headquartered in Las Vegas, Nevada.

About Grid Dynamics

Grid Dynamics Holdings, Inc., together with its subsidiaries, provides technology consulting, platform and product engineering, and analytics services in North America, Europe, and internationally. It offers cloud platform and product engineering services, such as architecting, designing, and building scalable and secure cloud-based platforms and business applications; and AI/machine learning and data platform engineering services that build platforms to facilitate batch and streaming data ingestion, quality governance, orchestration, semantic modeling, observability, and analysis at scale. The company provides digital engagement services, including digital ecosystem design and implementation; and supply chain, Internet of Thing, and advanced manufacturing, which focuses on transforming traditional operations into smart and connected ecosystems. It serves customers that operate in the tech, media, telecommunications, retail, consumer packaged goods, manufacturing, and finance industries. The company was formerly known as ChaSerg Technology Acquisition Corp. and changed its name to Grid Dynamics Holdings, Inc. Grid Dynamics Holdings, Inc. was founded in 2006 and is headquartered in San Ramon, California.