The shares of Abraxas Petroleum Corporation have decreased by more than -36.59% this year alone. The shares recently went down by -7.69% or -$0.13 and now trades at $1.56. The shares of Wix.com Ltd. (NASDAQ:WIX), has jumped by 62.80% year to date as of 12/06/2018. The shares currently trade at $93.69 and have been able to report a change of -0.76% over the past one week.
The stock of Abraxas Petroleum Corporation and Wix.com Ltd. were two of the most active stocks on Thursday. 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. AXAS has an EBITDA margin of 21.42%, this implies that the underlying business of AXAS is more profitable. The ROI of AXAS is 11.00% while that of WIX is -385.90%. These figures suggest that AXAS ventures generate a higher ROI than that of WIX.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, AXAS’s free cash flow per share is a negative -0.04, while that of WIX is positive 0.01.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 AXAS is 0.50 and that of WIX is 2.20. This implies that it is easier for AXAS to cover its immediate obligations over the next 12 months than WIX. The debt ratio of AXAS is 1.36 compared to 2.49 for WIX. WIX can be able to settle its long-term debts and thus is a lower financial risk than AXAS.Valuation
AXAS currently trades at a forward P/E of 4.00, a P/B of 2.33, and a P/S of 1.85 while WIX trades at a forward P/E of 64.52, a P/B of 33.82, and a P/S of 8.06. This means that looking at the earnings, book values and sales basis, AXAS 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 AXAS is currently at a -60.9% to its one-year price target of 3.99. Looking at its rival pricing, WIX is at a -18.04% relative to its price target of 114.31.
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), AXAS is given a 1.40 while 1.90 placed for WIX. This means that analysts are more bullish on the outlook for WIX 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 AXAS is 2.93 while that of WIX is just 2.19. This means that analysts are more bullish on the forecast for WIX stock.
The stock of Wix.com Ltd. defeats that of Abraxas Petroleum Corporation when the two are compared, with WIX taking 4 out of the total factors that were been considered. WIX 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, WIX is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for WIX is better on when it is viewed on short interest.