Quality Systems (NASDAQ: QSII) and Agilysys (NASDAQ:AGYS) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

This table compares Quality Systems and Agilysys’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Quality Systems 0.46% 10.88% 6.97%
Agilysys -6.56% -7.63% -5.28%

Valuation & Earnings

This table compares Quality Systems and Agilysys’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Quality Systems $531.02 million 2.36 $2.42 million $0.57 34.39
Agilysys $127.36 million 2.79 -$8.35 million ($0.37) -41.35

Quality Systems has higher revenue and earnings than Agilysys. Agilysys is trading at a lower price-to-earnings ratio than Quality Systems, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

70.3% of Quality Systems shares are held by institutional investors. Comparatively, 85.9% of Agilysys shares are held by institutional investors. 17.9% of Quality Systems shares are held by insiders. Comparatively, 34.7% of Agilysys shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Quality Systems and Agilysys, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quality Systems 4 5 1 0 1.70
Agilysys 0 0 0 0 N/A

Quality Systems currently has a consensus target price of $15.94, indicating a potential downside of 18.69%. Given Quality Systems’ higher probable upside, analysts plainly believe Quality Systems is more favorable than Agilysys.

Volatility and Risk

Quality Systems has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Agilysys has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500.

Summary

Quality Systems beats Agilysys on 10 of the 13 factors compared between the two stocks.

Quality Systems Company Profile

Quality Systems, Inc., together with its subsidiaries, develops and markets software and services that automate various aspects of practice management (PM) and electronic health records for medical and dental practices in the United States. The company's NextGen division provides integrated clinical, financial, and connectivity solutions for ambulatory and dental provider organizations. Its principal products include the NextGen Ambulatory product suite; interoperability solutions; and MediTouch, a cloud-based software suite comprising clearinghouse, PM, electronic health records, and patient portals, which enable mobility, workflow automation, and reporting and analytics. Its RCM Services Division offers technology-based solutions that are designed to optimize clients' revenue cycle costs and process efficiency, as well as to enhance clients' cash flow. This division provides revenue cycle management optimization services; and billing and collections, claims submissions and reconciliation, electronic remittance and payment posting, accounts receivable management, patient client service, advance analytics, charge entry and capture, enrollment credentialing, and software setup, hosting, and support services. The company's QSI Dental division focuses on developing, marketing, and supporting software suites for dental group organizations. This division also offers QSIDental Web, a cloud-based and software as a service and PM clinical software solution; and sells licenses to its products. The company also provides software implementation, training, support, and maintenance services; and electronic data interchange services. It serves single and small practice physicians, physician hospital organizations, management service organizations, accountable care organizations, ambulatory care centers, community health centers, and medical and dental schools through a sales force and a reseller channel. The company was founded in 1974 and is headquartered in Irvine, California.

Agilysys Company Profile

Agilysys, Inc., together with its subsidiaries, operates as a developer and marketer of hardware and software products and services to the hospitality industry in North America, Europe, and Asia. It specializes in point-of-sale, property management, inventory and procurement, workforce management, and mobile and wireless solutions that are designed to streamline operations, enhance efficiency, increasing guest recruitment and wallet share, and enhance the overall guest experience. The company also offers support and maintenance of software and hardware products, and subscription services; and professional services. It serves various sectors, including gaming; hotels, resorts, and cruise; foodservice management; and restaurants, universities, stadia, and healthcare. The company was formerly known as Pioneer-Standard Electronics, Inc. and changed its name to Agilysys, Inc. in 2003. Agilysys, Inc. was founded in 1963 and is based in Alpharetta, Georgia.

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