Head-To-Head Analysis: Where Food Comes From (NASDAQ:WFCF) & Inspired Entertainment (NASDAQ:INSE)

Where Food Comes From (NASDAQ:WFCF) and Inspired Entertainment (NASDAQ:INSE) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Profitability

This table compares Where Food Comes From and Inspired Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Where Food Comes From	7.50%	19.58%	11.83%
Inspired Entertainment	-0.10%	-6.35%	1.44%

Insider and Institutional Ownership

18.8% of Where Food Comes From shares are owned by institutional investors. Comparatively, 77.4% of Inspired Entertainment shares are owned by institutional investors. 49.2% of Where Food Comes From shares are owned by company insiders. Comparatively, 12.9% of Inspired Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Where Food Comes From and Inspired Entertainment”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Where Food Comes From	$25.14 million	2.52	$2.15 million	$0.35	34.26
Inspired Entertainment	$323.00 million	0.81	$7.60 million	($0.01)	-978.02

Inspired Entertainment has higher revenue and earnings than Where Food Comes From. Inspired Entertainment is trading at a lower price-to-earnings ratio than Where Food Comes From, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Where Food Comes From has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Inspired Entertainment has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Where Food Comes From and Inspired Entertainment, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Where Food Comes From	0	0	0	0	0.00
Inspired Entertainment	0	1	2	1	3.00

Inspired Entertainment has a consensus target price of $15.00, indicating a potential upside of 53.22%. Given Inspired Entertainment’s stronger consensus rating and higher probable upside, analysts plainly believe Inspired Entertainment is more favorable than Where Food Comes From.

Summary

Inspired Entertainment beats Where Food Comes From on 8 of the 15 factors compared between the two stocks.

About Where Food Comes From

Where Food Comes From, Inc., together with its subsidiaries, operates as a third-party food verification company in North America. The company operates through Verification and Certification, and Professional Services segments. It conducts on-site and desk audits to verify that claims being made about livestock, food, other specialty crops, and agricultural and aquaculture products are accurate, as well as offers Where Food Comes From Source Verified retail and restaurant labeling program, which connects consumers directly to the source of the food they purchase through product labeling, and web-based information sharing and education. It also offers professional services and technology solutions; verification solutions; and consulting services, as well as sells hardware. The company serves beef and pork packers, organic producers and processors, and specialty retail chains. The company was formerly known as Integrated Management Information, Inc. and changed its name to Where Food Comes From, Inc. in December 2012. Where Food Comes From, Inc. was founded in 1996 and is based in Castle Rock, Colorado.

About Inspired Entertainment

Inspired Entertainment, Inc., a gaming technology company, engages in the supply of content, platform, and other products and services to regulated lottery, betting, and gaming operators worldwide. It operates in four segments: Gaming, Virtual Sports, Interactive, and Leisure. The Gaming segment supplies gaming terminals and software to betting offices, casinos, gaming halls, and high street adult gaming centers; a portfolio of games through its digital terminals under the Centurion and Super Hot Fruits names; and traditional casino games, such as roulette, blackjack, and number games. The Virtual Sports segment designs, develops, markets, and distributes ultra-high-definition sports games, including greyhounds, tennis, motor racing, cycling, cricket, speedway, golf, and dart, and other horse racing games under the V-Play Soccer, V-Play Women's Soccer, V-Play Football, V-Play Basketball, V-Play Baseball, and V-Play NFLA names. The Interactive segment provides a range of random number generated casino content from feature-rich bonus games to European-style casino free spins and table games. The Leisure segment supplies gaming terminals and amusement machines in pubs, bingo halls, and adult gaming centers, as well as family entertainment centers, bowling centers, and other entertainment venues. Inspired Entertainment, Inc. is headquartered in New York, New York.