Reviewing PowerSchool (NYSE:PWSC) and Sapiens International (NASDAQ:SPNS)

Sapiens International (NASDAQ:SPNS) and PowerSchool (NYSE:PWSC) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.

Volatility & Risk

Sapiens International has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, PowerSchool has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500.

Profitability

This table compares Sapiens International and PowerSchool’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sapiens International	12.92%	17.60%	11.59%
PowerSchool	-7.51%	6.10%	2.83%

Earnings and Valuation

This table compares Sapiens International and PowerSchool”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sapiens International	$514.58 million	4.01	$62.44 million	$1.22	30.34
PowerSchool	$740.86 million	6.27	-$31.14 million	($0.24)	-95.04

Sapiens International has higher earnings, but lower revenue than PowerSchool. PowerSchool is trading at a lower price-to-earnings ratio than Sapiens International, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

30.7% of Sapiens International shares are owned by institutional investors. Comparatively, 65.3% of PowerSchool shares are owned by institutional investors. 16.0% of Sapiens International shares are owned by company insiders. Comparatively, 0.6% of PowerSchool shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Sapiens International and PowerSchool, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sapiens International	1	0	2	0	2.33
PowerSchool	0	10	3	0	2.23

Sapiens International presently has a consensus target price of $41.67, suggesting a potential upside of 12.58%. PowerSchool has a consensus target price of $24.02, suggesting a potential upside of 5.30%. Given Sapiens International’s stronger consensus rating and higher probable upside, equities analysts plainly believe Sapiens International is more favorable than PowerSchool.

Summary

Sapiens International beats PowerSchool on 10 of the 14 factors compared between the two stocks.

About Sapiens International

Sapiens International Corporation N.V. provides software solutions for the insurance industry in North America, the United Kingdom, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company provides various solutions for property and casualty commercial and personal lines, life and pensions, and reinsurance fields. It offers IDITSuite, an AI powered, end-to-end insurance software; DigitalSuite, a cloud-native, future-proof digital engagement platform; IDITGo, a pre-configured, data-enriched insurance launch and accelerator platform solutions; consultancy services for property and casualty commercial lines; and Tia Enterprise solution for customer engagement. The company also provides CoreSuite, an end-to-end cloud and digital PAS for individual and group products across life, health, wealth, and pensions; CustomerConnect, a dynamic self-service and persona-based portal to engage with insureds; AgentConnect, a portal for agents and brokers to focus on sales enablement, customer retention, and increasing customer value; and ReinsuranceMaster, a reinsurance automation software that provides insurers full financial control and flexibility over their entire reinsurance process. The company was founded in 1982 and is headquartered in Holon, Israel.

About PowerSchool

PowerSchool Holdings, Inc., together with its subsidiaries, offers cloud-based software to the K-12 education market in the United States, Canada, and internationally. Its solution embedded in school workflows and is used on daily basis by educators, students, administrators, and parents in schools and districts. In addition, the company provides cloud-based technology platform helps schools and districts manage state reporting and related compliance, special education, finance, human resource, talent, registration, attendance, funding, learning, instruction, behavior, grading, college and career readiness, assessments, and analytics. The company serves state departments of education, public school districts, charter schools, independent schools, virtual schools, and others. PowerSchool Holdings, Inc. was incorporated in 2020 and is headquartered in Folsom, California.