The shares of SMART Global Holdings, Inc. (NASDAQ:SGH) and DocuSign, Inc. (NASDAQ:DOCU) were among the active stocks of the last trading sessions. SMART Global Holdings, Inc. (NASDAQ:SGH) declined to -10.07% closing at the price of $30.71 whereas the shares of DocuSign, Inc. (NASDAQ:DOCU) declined -4.51% with the decrease of -2.04 points closing at the price of $43.23. SMART Global Holdings, Inc. has currently decrease -32.01% in its stock over the period of 6-months while its rival DocuSign, Inc. added 0% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of SMART Global Holdings, Inc. (NASDAQ:SGH) is 7.9% while the ROI of DocuSign, Inc. (NASDAQ:DOCU) is 16.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SGH’s EBITDA Margin is 4.88 whereas DOCU’s is -21.52.
Both the profitability ratios suggest a mixed sentiment for SMART Global Holdings, Inc. (NASDAQ:SGH) and DocuSign, Inc. (NASDAQ:DOCU).
EPS & Surprise Factor
SMART Global Holdings, Inc. (NASDAQ:SGH) reported $1.72/share EPS for the previous quarter where analysts were predicting an EPS to be $1.66/share Thus beating the analyst Estimates with a Surprise Factor of 3.6 Percent. While, DocuSign, Inc. (NASDAQ:DOCU) reported EPS of $0.03/share in the last quarter. The analysts projected EPS of $0.01/share depicting a Surprise of 200 Percent.
Taking a look at Earnings per Share, DocuSign, Inc. tends to be beating the analyst estimates more than SMART Global Holdings, Inc.. so DOCU is more profitable than SGH.
Technical Analysis of SMART Global Holdings, Inc. & DocuSign, Inc.
Moving average convergence divergence (MACD) shows that SMART Global Holdings, Inc. (NASDAQ:SGH) is on a PRICE RELATIVITY trend While DocuSign, Inc. (NASDAQ:DOCU) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the SMART Global Holdings, Inc. was in BULLISH territory and DocuSign, Inc. was in territory.
SGH’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While DOCU’s candle is with .
EPS Growth Rate: SGH’s 69.84% versus DOCU’s 0%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of SMART Global Holdings, Inc. (NASDAQ:SGH) is predicted at 69.84% while DocuSign, Inc. (NASDAQ:DOCU) stands at 0%. These numbers suggest that SGH is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of SGH stands at 1.6 while DOCU is at 2.5 whereas the debt ratio of the prior is 0.95 while the debt ratio of the later is 0.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 1.5 for SGH and 2.1 for DOCU which means SGH has Buy rating whereas DOCU has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for SGH is $62.67 which is 51% of its current price while DOCU has price target of 66.71 which is 35.2% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
SGH currently has price to earning P/E ratio of 9.46 whereas DOCU has 0 while the forward P/E ratio for the prior stands at 4.08 and for the later it depicts the value of 284.41.
The price to Book P/B for SGH is 4.1, Price to Sale is at 0.48 and for DOCU these ratios stand at 9.65 and 11.39.