The shares of Bloom Energy Corporation have increased by more than 3.41% this year alone. The shares recently went down by -3.10% or -$0.33 and now trades at $10.32. The shares of Veritone, Inc. (NASDAQ:VERI), has jumped by 84.74% year to date as of 07/29/2019. The shares currently trade at $7.02 and have been able to report a change of -7.63% over the past one week.
The stock of Bloom Energy Corporation and Veritone, Inc. were two of the most active stocks on Monday. 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.
When a company is able to grow consistently in terms of earnings at a high compound rate have the highest likelihood of creating value for its shareholders over time. Analysts have predicted that BE will grow it’s earning at a 25.00% annual rate in the next 5 years. This is in contrast to VERI which will have a positive growth at a 50.00% annual rate. This means that the higher growth rate of VERI implies a greater potential for capital appreciation over the years.
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 BE is -23.90% while that of VERI is -102.80%. These figures suggest that BE ventures generate a higher ROI than that of VERI.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, BE’s free cash flow per share is a positive -0, while that of VERI is negative -0.02.
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 BE is 2.30 and that of VERI is 1.50. This implies that it is easier for BE to cover its immediate obligations over the next 12 months than VERI.Valuation
BE currently trades at a forward P/E of 27.67, and a P/S of 1.51 while VERI trades at a P/B of 2.38, and a P/S of 4.12. This means that looking at the earnings, book values and sales basis, BE 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 BE is currently at a -52.29% to its one-year price target of 21.63. Looking at its rival pricing, VERI is at a -50.91% relative to its price target of 14.30.
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), BE is given a 2.40 while 1.80 placed for VERI. This means that analysts are more bullish on the outlook for BE 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 BE is 9.77 while that of VERI is just 6.63. This means that analysts are more bullish on the forecast for VERI stock.
The stock of Veritone, Inc. defeats that of Bloom Energy Corporation when the two are compared, with VERI taking 5 out of the total factors that were been considered. VERI 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, VERI is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for VERI is better on when it is viewed on short interest.