DealerTrack Technologies (TRAK) versus Model N (MODN) Critical Analysis

DealerTrack Technologies (NASDAQ: TRAK) and Model N (NYSE:MODN) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Insider and Institutional Ownership

65.6% of Model N shares are owned by institutional investors. 18.9% of Model N shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares DealerTrack Technologies and Model N’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DealerTrack Technologies N/A N/A N/A ($0.67) N/A
Model N $131.17 million 3.79 -$39.54 million ($1.29) -13.06

DealerTrack Technologies has higher earnings, but lower revenue than Model N. Model N is trading at a lower price-to-earnings ratio than DealerTrack Technologies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DealerTrack Technologies and Model N’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DealerTrack Technologies -3.45% -3.48% -1.59%
Model N -26.17% -55.03% -14.12%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for DealerTrack Technologies and Model N, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DealerTrack Technologies 0 0 0 0 N/A
Model N 0 2 4 0 2.67

Model N has a consensus price target of $18.00, indicating a potential upside of 6.82%.

About DealerTrack Technologies

Dealertrack Technologies, Inc. provides Web-based software solutions and services. The Company provides solutions and services for segments of the automotive retail industry, including dealers, lenders, original equipment manufacturers (OEMs), third-party retailers, aftermarket providers and other service providers. Dealertrack operates the online credit application networks in the United States and Canada. The Company’s solutions includes Digital Marketing solutions, Dealer Management solutions, F&I solutions, Inventory solutions, Registration & Titling solutions, and Collateral Management solutions. Digital Marketing solutions include digital marketing tools, such as desktop and mobile Website design, search engine optimization (SEO), search engine marketing (SEM), social media and reputation management tools. Registration & Titling solutions include online and cross-state vehicle registration services.

About Model N

Model N, Inc. is a provider of revenue management solutions for life science and technology companies. The Company’s solutions enable its customers to maximize revenues and reduce revenue compliance risk by transforming their revenue life cycle from a series of tactical, disjointed operations into a strategic end-to-end process. The Company’s solutions include Revenue Enterprise Cloud, Revenue Intelligence Cloud and Revvy Revenue Management. The Company provides solutions that span the organizational and operational boundaries of functions, such as sales, marketing and finance, and serve as a system of record for revenue management processes, including pricing, contracts, rebates, incentives and regulatory compliance. The Company’s application suites are designed to work with enterprise resource planning (ERP) and customer relationship management (CRM) applications. The Company also offers implementation services, managed services, strategic services and customer support.

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