Financial Survey: Medallia (NYSE:MDLA) and DigitalOcean (NASDAQ:DOCN)

Medallia (NYSE:MDLA) and DigitalOcean (NASDAQ:DOCN) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, risk, profitability, valuation, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of current recommendations for Medallia and DigitalOcean, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medallia 0 12 1 0 2.08
DigitalOcean 0 2 8 0 2.80

Medallia currently has a consensus target price of $35.65, indicating a potential upside of 5.25%. DigitalOcean has a consensus target price of $67.60, indicating a potential downside of 15.10%. Given Medallia’s higher possible upside, analysts clearly believe Medallia is more favorable than DigitalOcean.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Medallia $477.22 million 11.42 -$148.66 million ($0.76) -44.57
DigitalOcean $318.38 million 26.84 -$43.57 million N/A N/A

DigitalOcean has lower revenue, but higher earnings than Medallia.

Profitability

This table compares Medallia and DigitalOcean’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medallia -37.34% -30.58% -10.02%
DigitalOcean N/A N/A N/A

Institutional & Insider Ownership

80.8% of Medallia shares are owned by institutional investors. Comparatively, 30.6% of DigitalOcean shares are owned by institutional investors. 18.6% of Medallia shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

DigitalOcean beats Medallia on 7 of the 11 factors compared between the two stocks.

About Medallia

Medallia, Inc. engages in the provision of customer experience management software. Its products include surveys, CX profiles, CX journeys, action intelligence, and alerts and reporting. The firm also offers CX professionals, EX professionals, account management, contact centers, location-based operations, and research and insights solutions. It serves industries including automotive, financial services, healthcare, life sciences, nonprofit, retail, and telecommunications and media. The company was founded by Borge Hald and Amy Pressman in 2000 and is headquartered in San Francisco, CA.

About DigitalOcean

DigitalOcean Holdings, Inc. operates a cloud computing platform that offers infrastructure and platform tools for developers, start-ups, and small and medium-sized businesses in North America, Europe, Asia, and internationally. It offers infrastructure solutions across compute, storage, and networking fields, as well as managed application, container, and database offerings to developers. The company's users include software engineers, researchers, data scientists, system administrators, students, and hobbyists. Its customers use its platform in various industry verticals and for a range of use cases, such as web and mobile applications, website hosting, e-commerce, media and gaming, personal web projects, managed services, and others. The company was incorporated in 2012 and is headquartered in New York, New York.

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