The shares of Alarm.com Holdings, Inc. (NASDAQ:ALRM) and Dana Incorporated (NYSE:DAN) were among the active stocks of the last trading sessions. Alarm.com Holdings, Inc. (NASDAQ:ALRM) soared to 5.08% closing at the price of $49.65 whereas the shares of Dana Incorporated (NYSE:DAN) declined -2.36% with the decrease of -0.36 points closing at the price of $14.91. Alarm.com Holdings, Inc. has currently increase 25.25% in its stock over the period of 6-months while its rival Dana Incorporated subtracted -36.96% 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 Alarm.com Holdings, Inc. (NASDAQ:ALRM) is 12.9% while the ROI of Dana Incorporated (NYSE:DAN) is 13.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ALRM’s EBITDA Margin is 30 whereas DAN’s is 4.99.
Both the profitability ratios suggest a mixed sentiment for Alarm.com Holdings, Inc. (NASDAQ:ALRM) and Dana Incorporated (NYSE:DAN).
EPS & Surprise Factor
Alarm.com Holdings, Inc. (NASDAQ:ALRM) reported $0.36/share EPS for the previous quarter where analysts were predicting an EPS to be $0.25/share Thus beating the analyst Estimates with a Surprise Factor of 44 Percent. While, Dana Incorporated (NYSE:DAN) reported EPS of $0.77/share in the last quarter. The analysts projected EPS of $0.76/share depicting a Surprise of 1.3 Percent.
Taking a look at Earnings per Share, Alarm.com Holdings, Inc. tends to be beating the analyst estimates more than Dana Incorporated. so ALRM is more profitable than DAN.
Technical Analysis of Alarm.com Holdings, Inc. & Dana Incorporated
Moving average convergence divergence (MACD) shows that Alarm.com Holdings, Inc. (NASDAQ:ALRM) is on a PRICE RELATIVITY trend While Dana Incorporated (NYSE:DAN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Alarm.com Holdings, Inc. was in BULLISH territory and Dana Incorporated was in BEARISH territory.
ALRM’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While DAN’s candle is BEARISH with HIGH.
EPS Growth Rate: ALRM’s 19.3% versus DAN’s 8.35%
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 Alarm.com Holdings, Inc. (NASDAQ:ALRM) is predicted at 19.3% while Dana Incorporated (NYSE:DAN) stands at 8.35%. These numbers suggest that ALRM 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 ALRM stands at 4.2 while DAN is at 1.6 whereas the debt ratio of the prior is 0.26 while the debt ratio of the later is 1.45.
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 1.9 for ALRM and 2.7 for DAN which means ALRM has Buy rating whereas DAN 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 ALRM is $56.27 which is 11.76% of its current price while DAN has price target of 20.5 which is 27.27% 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.
ALRM currently has price to earning P/E ratio of 53.91 whereas DAN has 5.38 while the forward P/E ratio for the prior stands at 35.98 and for the later it depicts the value of 4.69.
The price to Book P/B for ALRM is 8.85, Price to Sale is at 6.1 and for DAN these ratios stand at 1.74 and 0.27.