The shares of Iron Mountain Incorporated have decreased by more than -10.10% this year alone. The shares recently went up by 0.06% or $0.02 and now trades at $33.92. The shares of Pivotal Software, Inc. (NYSE:PVTL), has jumped by 13.41% year to date as of 12/04/2018. The shares currently trade at $17.84 and have been able to report a change of 2.23% over the past one week.
The stock of Iron Mountain Incorporated and Pivotal Software, Inc. were two of the most active stocks on Tuesday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.Profitability and Returns
Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. IRM has an EBITDA margin of 30.34%, this implies that the underlying business of IRM is more profitable. The ROI of IRM is 5.70% while that of PVTL is 30.40%. These figures suggest that PVTL ventures generate a higher ROI than that of IRM.Cash Flow
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, IRM’s free cash flow per share is a negative -1.26.Liquidity and Financial Risk
The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for IRM is 1.00 and that of PVTL is 2.60. This implies that it is easier for IRM to cover its immediate obligations over the next 12 months than PVTL. The debt ratio of IRM is 4.30 compared to 0.00 for PVTL. IRM can be able to settle its long-term debts and thus is a lower financial risk than PVTL.Valuation
IRM currently trades at a forward P/E of 28.50, a P/B of 5.01, and a P/S of 2.32 while PVTL trades at a P/B of 3.72, and a P/S of 7.92. This means that looking at the earnings, book values and sales basis, IRM is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.Analyst Price Targets and Opinions
The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of IRM is currently at a -9.3% to its one-year price target of 37.40. Looking at its rival pricing, PVTL is at a -28.38% relative to its price target of 24.91.
When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), IRM is given a 2.70 while 2.30 placed for PVTL. This means that analysts are more bullish on the outlook for IRM stocks.Insider Activity and Investor Sentiment
Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for IRM is 12.86 while that of PVTL is just 3.49. This means that analysts are more bullish on the forecast for PVTL stock.
The stock of Iron Mountain Incorporated defeats that of Pivotal Software, Inc. when the two are compared, with IRM taking 2 out of the total factors that were been considered. IRM happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, IRM is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for IRM is better on when it is viewed on short interest.