The shares of HubSpot, Inc. have increased by more than 16.69% this year alone. The shares recently went up by 6.34% or $6.15 and now trades at $103.15. The shares of MobileIron, Inc. (NASDAQ:MOBL), has jumped by 29.49% year to date as of 02/14/2018. The shares currently trade at $5.05 and have been able to report a change of 24.69% over the past one week.
The stock of HubSpot, Inc. and MobileIron, Inc. were two of the most active stocks on Wednesday. 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. The ROI of HUBS is -37.70% while that of MOBL is -165.00%. These figures suggest that HUBS ventures generate a higher ROI than that of MOBL.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, HUBS’s free cash flow per share is a positive 0.
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 HUBS is 3.60 and that of MOBL is 1.30. This implies that it is easier for HUBS to cover its immediate obligations over the next 12 months than MOBL. The debt ratio of HUBS is 0.00 compared to 0.00 for MOBL. MOBL can be able to settle its long-term debts and thus is a lower financial risk than HUBS.
HUBS currently trades at a forward P/E of 236.58, a P/B of 18.32, and a P/S of 10.94 while MOBL trades at a P/B of 20.20, and a P/S of 2.77. This means that looking at the earnings, book values and sales basis, HUBS 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 HUBS is currently at a 8.08% to its one-year price target of 95.44. Looking at its rival pricing, MOBL is at a 5.21% relative to its price target of 4.80. This figure implies that over the next one year, MOBL is a better investment.
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), HUBS is given a 1.90 while 2.80 placed for MOBL. This means that analysts are more bullish on the outlook for MOBL 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 HUBS is 8.63 while that of MOBL is just 1.95. This means that analysts are more bullish on the forecast for MOBL stock.
The stock of MobileIron, Inc. defeats that of HubSpot, Inc. when the two are compared, with MOBL taking 5 out of the total factors that were been considered. MOBL 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, MOBL is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for MOBL is better on when it is viewed on short interest.