Critical Review: Priority Technology (NASDAQ:PRTH) vs. Research Solutions (NASDAQ:RSSS)

Priority Technology (NASDAQ:PRTH) and Research Solutions (NASDAQ:RSSS) are both small-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Profitability

This table compares Priority Technology and Research Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Priority Technology	-0.17%	N/A	-0.09%
Research Solutions	-1.05%	-4.96%	-1.63%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Priority Technology and Research Solutions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Priority Technology	0	1	2	0	2.67
Research Solutions	0	0	2	0	3.00

Priority Technology currently has a consensus price target of $7.75, indicating a potential upside of 145.25%. Research Solutions has a consensus price target of $4.68, indicating a potential upside of 51.79%. Given Priority Technology’s higher probable upside, equities research analysts plainly believe Priority Technology is more favorable than Research Solutions.

Institutional & Insider Ownership

11.5% of Priority Technology shares are owned by institutional investors. Comparatively, 33.6% of Research Solutions shares are owned by institutional investors. 77.4% of Priority Technology shares are owned by insiders. Comparatively, 26.5% of Research Solutions shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Priority Technology and Research Solutions’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Priority Technology	$755.61 million	0.32	-$1.31 million	($0.63)	-5.02
Research Solutions	$37.70 million	2.66	$570,000.00	($0.02)	-154.00

Research Solutions has lower revenue, but higher earnings than Priority Technology. Research Solutions is trading at a lower price-to-earnings ratio than Priority Technology, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Priority Technology has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Research Solutions has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Summary

Priority Technology beats Research Solutions on 8 of the 13 factors compared between the two stocks.

About Priority Technology

Priority Technology Holdings, Inc. operates as a payment technology company in the United States. The company operates through three segments: Small and Medium-Sized Businesses (SMB) Payments, Business-To-Business (B2B) Payments, and Enterprise Payments. It offers SMB payments processing solutions for B2C transactions through independent sales organizations, financial institutions, independent software vendors, and other referral partners through its MX product suite, which includes MX Connect and MX Merchant products, such as MX Insights, MX Storefront, MX Retail, MX Invoice, MX B2B and ACH.com, and others, which provides flexible and customizable set of business applications that helps to manage critical business work functions and revenue performance to resellers and merchant clients using core payment processing. The company also offers CPX, a platform that offers accounts payable automation solutions, including virtual card, purchase card, ACH +, dynamic discounting, or check. In addition, it provides curated managed services; payment-adjacent technologies to facilitate the acceptance of electronic payments from customers; and Plastiq payables management software, which helps businesses in improving cash flow with instant access to working capital. Further, the company offers embedded finance and BaaS solutions to enterprise customers to modernize legacy platforms and accelerate software partners' strategies to monetize payments; and managed services solutions that provide audience-specific programs for institutional partners and other third parties; and consulting and development solutions. It serves SMB, and enterprises, as well as distribution partners, including retail and wholesale independent sales organizations, financial institutions, and independent software vendors. The company was founded in 2005 and is headquartered in Alpharetta, Georgia.

About Research Solutions

Research Solutions, Inc., through its subsidiaries, provides cloud-based software-as-a-service research platform. The company is also involved in the transactional sale of published scientific, technical, and medical (STM) content managed, sourced, and delivered through the Transactions platform. Its solutions enable life science and other research intensive organizations to accelerate their research and development activities with access and management STM articles used throughout the intellectual property development lifecycle. The company was formerly known as Derycz Scientific, Inc. and changed its name to Research Solutions, Inc. in March 2013. Research Solutions, Inc. was incorporated in 2006 and is based in Henderson, Nevada.