The shares of AAC Holdings, Inc. (NYSE:AAC) and ServiceSource International, Inc. (NASDAQ:SREV) were among the active stocks of the last trading sessions. AAC Holdings, Inc. (NYSE:AAC) declined to -44.26% closing at the price of $2.96 whereas the shares of ServiceSource International, Inc. (NASDAQ:SREV) soared 4.62% with the increase of 0.06 points closing at the price of $1.36. AAC Holdings, Inc. has currently decrease -74.15% in its stock over the period of 6-months while its rival ServiceSource International, Inc. subtracted -64.58% 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 AAC Holdings, Inc. (NYSE:AAC) is -1.2% while the ROI of ServiceSource International, Inc. (NASDAQ:SREV) is 5.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AAC’s EBITDA Margin is 11.11 whereas SREV’s is -7.53.
Both the profitability ratios suggest a mixed sentiment for AAC Holdings, Inc. (NYSE:AAC) and ServiceSource International, Inc. (NASDAQ:SREV).
EPS & Surprise Factor
AAC Holdings, Inc. (NYSE:AAC) reported $-0.08/share EPS for the previous quarter where analysts were predicting an EPS to be $0.24/share Thus lagging the analyst Estimates with a Surprise Factor of -133.3 Percent. While, ServiceSource International, Inc. (NASDAQ:SREV) reported EPS of $0.01/share in the last quarter. The analysts projected EPS of $0.01/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, ServiceSource International, Inc. tends to be beating the analyst estimates more than AAC Holdings, Inc.. so SREV is more profitable than AAC.
Technical Analysis of AAC Holdings, Inc. & ServiceSource International, Inc.
Moving average convergence divergence (MACD) shows that AAC Holdings, Inc. (NYSE:AAC) is on a PRICE RELATIVITY trend While ServiceSource International, Inc. (NASDAQ:SREV) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the AAC Holdings, Inc. was in BEARISH territory and ServiceSource International, Inc. was in BEARISH territory.
AAC’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While SREV’s candle is BULLISH with HIGH.
EPS Growth Rate: AAC’s 20% versus SREV’s 25%
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 AAC Holdings, Inc. (NYSE:AAC) is predicted at 20% while ServiceSource International, Inc. (NASDAQ:SREV) stands at 25%. These numbers suggest that SREV 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 AAC stands at 2.6 while SREV is at 1.3 whereas the debt ratio of the prior is 2.1 while the debt ratio of the later is 1.44.
The values of the both ratios suggest that AAC is more suitable investment when the liquidity and risk is the main concern.
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 1.7 for AAC and 2.7 for SREV which means AAC has Buy rating whereas SREV 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 AAC is $13 which is 77.23% of its current price while SREV has price target of 4 which is 66% 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.
AAC currently has price to earning P/E ratio of 0 whereas SREV has 10.71 while the forward P/E ratio for the prior stands at 3.4 and for the later it depicts the value of 13.2.
The price to Book P/B for AAC is 0.46, Price to Sale is at 0.23 and for SREV these ratios stand at 1.2 and 0.51.