Critical Review: Innodata (INOD) & Shutterstock (SSTK)

Innodata (NASDAQ:INOD) and Shutterstock (NYSE:SSTK) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.

Volatility and Risk

Innodata has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, Shutterstock has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.

Profitability

This table compares Innodata and Shutterstock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Innodata -6.05% -4.43% -2.89%
Shutterstock 6.82% 8.76% 4.97%

Institutional and Insider Ownership

14.0% of Innodata shares are owned by institutional investors. Comparatively, 55.7% of Shutterstock shares are owned by institutional investors. 13.4% of Innodata shares are owned by insiders. Comparatively, 47.2% of Shutterstock shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Innodata and Shutterstock’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Innodata $60.93 million 0.69 -$5.05 million N/A N/A
Shutterstock $557.11 million 2.33 $16.72 million $0.71 52.20

Shutterstock has higher revenue and earnings than Innodata.

Analyst Ratings

This is a summary of recent ratings and price targets for Innodata and Shutterstock, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Innodata 0 0 0 0 N/A
Shutterstock 1 2 0 0 1.67

Shutterstock has a consensus target price of $42.33, suggesting a potential upside of 14.23%. Given Shutterstock’s higher possible upside, analysts plainly believe Shutterstock is more favorable than Innodata.

Summary

Shutterstock beats Innodata on 10 of the 10 factors compared between the two stocks.

About Innodata

Innodata Inc., a digital services and solutions company, provides technology solutions and services worldwide. The company operates through three segments: Digital Data Solutions (DDS), Innodata Advanced Data Solutions (IADS), and Media Intelligence Solutions (MIS). The DDS segment produces and distributes e-books; develops new digital information products; and provides operational support services for existing digital information products and systems, including content aggregation, extraction, encoding, indexing and abstracting, fabrication, and distribution. The IADS segment offers services that enable clients in the financial services, insurance, medical, and healthcare sectors to enhance decision-support through digital technologies. This segment provides APS.Extract for use with life insurance underwriting and claims; and docGenix system that extracts and classifies data from unstructured legal documents to enhance an organization's ability to analyze documentation and feed actionable data to downstream applications. The MIS segment provides media monitoring and analysis solutions, and professional services; and publishes Bulldog Reporter's Daily Dog, a daily e-newsletter; and Inside Health Media, a daily online newsletter, as well as offers media list and media intelligence services. This segment's technology platform monitors, aggregates, analyzes, and distributes content across traditional and digital media. The company serves publishers, media and information companies, digital retailers, banks, insurance companies, government agencies, and other industries through its professional staff, senior management, and direct sales personnel. Innodata Inc. was founded in 1988 and is headquartered in Ridgefield Park, New Jersey.

About Shutterstock

Shutterstock, Inc. provides content products and services in North America, Europe, and internationally. It offers digital imagery services, which include licensed photographs, vectors, illustrations, and video clips that customers use in their visual communications, such as Websites, digital and print marketing materials, corporate communications, books, publications, and video content; and commercial music services comprising music tracks and sound effects that are used to complement digital imagery. The company provides its services under the Shutterstock, Bigstock, Offset, Shutterstock Custom, Shutterstock Music, and Shutterstock Editorial names. It also offers digital asset management services through Webdam, a cloud-based digital asset management platform, which provides tools for customers to manage content and brand management assets; and Shutterstock Editor, a cloud-based workflow tool. The company serves marketing agencies, media professionals, and other organizations. Shutterstock, Inc. was founded in 2003 and is headquartered in New York, New York.

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