Porch Group (NASDAQ:PRCH) & Five9 (NASDAQ:FIVN) Critical Analysis

Porch Group (NASDAQ:PRCH) and Five9 (NASDAQ:FIVN) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.

Profitability

This table compares Porch Group and Five9’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Porch Group	6.91%	-51.86%	1.09%
Five9	2.77%	10.59%	3.87%

Analyst Recommendations

This is a summary of recent recommendations for Porch Group and Five9, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Porch Group	1	2	7	0	2.60
Five9	1	5	13	0	2.63

Porch Group currently has a consensus price target of $17.00, indicating a potential upside of 90.37%. Five9 has a consensus price target of $32.93, indicating a potential upside of 64.75%. Given Porch Group’s higher probable upside, equities analysts clearly believe Porch Group is more favorable than Five9.

Risk & Volatility

Porch Group has a beta of 3.11, meaning that its stock price is 211% more volatile than the S&P 500. Comparatively, Five9 has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Valuation & Earnings

This table compares Porch Group and Five9″s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Porch Group	$437.85 million	2.52	-$32.83 million	$0.29	30.79
Five9	$1.04 billion	1.50	-$12.80 million	$0.36	55.53

Five9 has higher revenue and earnings than Porch Group. Porch Group is trading at a lower price-to-earnings ratio than Five9, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

48.5% of Porch Group shares are owned by institutional investors. Comparatively, 96.6% of Five9 shares are owned by institutional investors. 23.3% of Porch Group shares are owned by company insiders. Comparatively, 1.6% of Five9 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Five9 beats Porch Group on 9 of the 14 factors compared between the two stocks.

About Porch Group

Porch Group, Inc., together with its subsidiaries, operates a vertical software and insurance platform in the United States. The company operates in two segments, Vertical Software and Insurance. The Vertical Software segment provides software and services to inspection, mortgage, and title companies on a subscription and transactional basis, as well as move and post-move services. This segment offers inspection software and services, title insurance software, mortgage software, moving services, mover and homeowner marketing, and measurement software for roofers. The Insurance segment offers consumers with insurance and warranty products to protect their homes. This segment provides property-related insurance and captive reinsurance products; and warranty products under the Porch Warranty, American Home Protect, and Residential Warranty Services brands. The company was founded in 2011 and is headquartered in Seattle, Washington.

About Five9

Five9, Inc., together with its subsidiaries, provides intelligent cloud software for contact centers in the United States, India, and internationally. It offers a virtual contact center cloud platform that delivers a suite of applications, which enables the breadth of contact center-related customer service, sales, and marketing functions. The company’s platform comprises of including interactive virtual agent, agent assist, workflow automation, workforce engagement management, AI insights, and AI summaries that allows to manage and optimize customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces. It also matches each customer interaction with an agent resource and delivers customer data to the agent in real-time through integrations with adjacent enterprise applications, such as CRM software, to optimize the customer experience and enhance agent productivity. The company serves customers in various industries, such as banking and financial services, business process outsourcers, retail, healthcare, technology, and education. Five9, Inc. was incorporated in 2001 and is headquartered in San Ramon, California.