Contrasting Inspired Entertainment (NASDAQ:INSE) and Where Food Comes From (NASDAQ:WFCF)

Inspired Entertainment (NASDAQ:INSE) and Where Food Comes From (NASDAQ:WFCF) are both small-cap business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Insider & Institutional Ownership

77.4% of Inspired Entertainment shares are held by institutional investors. Comparatively, 18.8% of Where Food Comes From shares are held by institutional investors. 12.9% of Inspired Entertainment shares are held by company insiders. Comparatively, 49.2% of Where Food Comes From shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Inspired Entertainment has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, Where Food Comes From has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Profitability

This table compares Inspired Entertainment and Where Food Comes From’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Inspired Entertainment	-0.10%	-6.35%	1.44%
Where Food Comes From	7.50%	19.58%	11.83%

Valuation and Earnings

This table compares Inspired Entertainment and Where Food Comes From”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Inspired Entertainment	$323.00 million	0.81	$7.60 million	($0.01)	-978.02
Where Food Comes From	$25.14 million	2.52	$2.15 million	$0.35	34.26

Inspired Entertainment has higher revenue and earnings than Where Food Comes From. Inspired Entertainment is trading at a lower price-to-earnings ratio than Where Food Comes From, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and price targets for Inspired Entertainment and Where Food Comes From, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Inspired Entertainment	0	1	2	1	3.00
Where Food Comes From	0	0	0	0	0.00

Inspired Entertainment currently has a consensus target price of $15.00, suggesting a potential upside of 53.22%. Given Inspired Entertainment’s stronger consensus rating and higher possible upside, research analysts clearly believe Inspired Entertainment is more favorable than Where Food Comes From.

Summary

Inspired Entertainment beats Where Food Comes From on 8 of the 15 factors compared between the two stocks.

About Inspired Entertainment

Inspired Entertainment, Inc., a gaming technology company, engages in the supply of content, platform, and other products and services to regulated lottery, betting, and gaming operators worldwide. It operates in four segments: Gaming, Virtual Sports, Interactive, and Leisure. The Gaming segment supplies gaming terminals and software to betting offices, casinos, gaming halls, and high street adult gaming centers; a portfolio of games through its digital terminals under the Centurion and Super Hot Fruits names; and traditional casino games, such as roulette, blackjack, and number games. The Virtual Sports segment designs, develops, markets, and distributes ultra-high-definition sports games, including greyhounds, tennis, motor racing, cycling, cricket, speedway, golf, and dart, and other horse racing games under the V-Play Soccer, V-Play Women's Soccer, V-Play Football, V-Play Basketball, V-Play Baseball, and V-Play NFLA names. The Interactive segment provides a range of random number generated casino content from feature-rich bonus games to European-style casino free spins and table games. The Leisure segment supplies gaming terminals and amusement machines in pubs, bingo halls, and adult gaming centers, as well as family entertainment centers, bowling centers, and other entertainment venues. Inspired Entertainment, Inc. is headquartered in New York, New York.

About Where Food Comes From

Where Food Comes From, Inc., together with its subsidiaries, operates as a third-party food verification company in North America. The company operates through Verification and Certification, and Professional Services segments. It conducts on-site and desk audits to verify that claims being made about livestock, food, other specialty crops, and agricultural and aquaculture products are accurate, as well as offers Where Food Comes From Source Verified retail and restaurant labeling program, which connects consumers directly to the source of the food they purchase through product labeling, and web-based information sharing and education. It also offers professional services and technology solutions; verification solutions; and consulting services, as well as sells hardware. The company serves beef and pork packers, organic producers and processors, and specialty retail chains. The company was formerly known as Integrated Management Information, Inc. and changed its name to Where Food Comes From, Inc. in December 2012. Where Food Comes From, Inc. was founded in 1996 and is based in Castle Rock, Colorado.