Reviewing Model N Inc. (MODN)’s and Ellie Mae Inc. (NYSE:ELLI)’s results

Both Model N Inc. (NYSE:MODN) and Ellie Mae Inc. (NYSE:ELLI) compete on a level playing field in the Application Software industry. We will evaluate their performance with regards to analyst recommendations, profitability, risk, institutional ownership, dividends, earnings and valuation.

Valuation and Earnings

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Model N Inc. 150.64M 3.54 27.68M -0.93 0.00
Ellie Mae Inc. 477.11M 7.24 32.40M 0.67 96.29

Table 1 showcases the gross revenue, earnings per share (EPS) and valuation of Model N Inc. and Ellie Mae Inc.

Profitability

Table 2 provides us the return on equity, return on assets and net margins of both businesses.

Net Margins Return on Equity Return on Assets
Model N Inc. -18.37% -69.8% -16.5%
Ellie Mae Inc. 6.79% 4.3% 3.8%

Risk & Volatility

A 0.6 beta indicates that Model N Inc. is 40.00% less volatile compared to Standard and Poor’s 500. From a competition point of view, Ellie Mae Inc. has a 1.33 beta which is 33.00% more volatile compared to Standard and Poor’s 500.

Liquidity

The Current Ratio of Model N Inc. is 1.2 while its Quick Ratio stands at 1.2. The Current Ratio of rival Ellie Mae Inc. is 5.2 and its Quick Ratio is has 5.2. Ellie Mae Inc. is better equipped to clear short and long-term obligations than Model N Inc.

Analyst Ratings

The following table delivered below contains the ratings and recommendations for Model N Inc. and Ellie Mae Inc.

Sell Ratings Hold Ratings Buy Ratings Rating Score
Model N Inc. 0 0 1 3.00
Ellie Mae Inc. 3 3 2 2.25

Model N Inc.’s upside potential currently stands at 35.85% and an $23 average price target. Competitively the average price target of Ellie Mae Inc. is $73.33, which is potential -25.85% downside. The information presented earlier suggests that Model N Inc. looks more robust than Ellie Mae Inc. as far as analyst opinion.

Insider & Institutional Ownership

The shares of both Model N Inc. and Ellie Mae Inc. are owned by institutional investors at 72% and 0% respectively. Model N Inc.’s share held by insiders are 9.7%. Insiders Competitively, held 0.7% of Ellie Mae Inc. shares.

Performance

In this table we provide the Weekly, Monthly, Quarterly, Half Yearly, Yearly and YTD Performance of both pretenders.

Performance (W) Performance (M) Performance (Q) Performance (HY) Performance (Y) Performance (YTD)
Model N Inc. 6.77% 9.24% -12.22% -17.41% -8.94% -6.92%
Ellie Mae Inc. -4.82% -4.84% -36.93% -40.46% -27.62% -28.38%

For the past year Model N Inc. has stronger performance than Ellie Mae Inc.

Summary

Ellie Mae Inc. beats Model N Inc. on 10 of the 13 factors.

Model N, Inc. provides revenue management cloud solutions for the life science and technology industries. The company develops applications, such as managed care and government pricing for life science companies; and channel incentives based on design wins for technology companies. It offers Revenue Enterprise Cloud, a set of transactional applications that serve as a system of record for, and automate the execution of revenue management processes, such as pricing, contracting, compliance, incentive, and rebate management. This suite includes price management, deal management, contract management, incentive and rebate management, and regulatory compliance management applications. The company also provides Revenue Intelligence Cloud, a range of intelligence applications that provide the analytical tools insights to define and optimize revenue management strategies. In addition, it offers Revvy Revenue Management, a set of multi-tenant cloud applications, which provides customers with predictable pricing, elastic infrastructures, and ease of implementation for the pharmaceutical, manufacturing, medical devices, and semiconductor and component manufacturing industries. This suite includes products, such as configure, price, and quote; global price management; and sales. Further, the company provides implementation, managed, strategic, and customer support services. It primarily serves large and mid-sized organizations worldwide through its direct sales force. As of September 30, 2015, the company had 84 license and subscription customers. Model N, Inc. was founded in 1999 and is headquartered in Redwood City, California, with additional offices in the United States, India, the United Kingdom, and Switzerland.

Ellie Mae, Inc. provides on-demand software solutions and services for the residential mortgage industry in the United States. The company provides Encompass, a proprietary software solution that combines loan origination and enterprise management software for mortgage originators into a system, as well as access to investors, lenders, and service providers on the Ellie Mae Network. Its Encompass solutions and services comprise Ellie Mae Total Quality Loan Program that offers fraud detection, valuation, validation, and risk analysis services; Encompass CenterWise, Encompass Compliance Service, and Encompass Docs Solution as integrated components; Encompass Docs Solution, a disclosure and closing document preparation solution; and Encompass Compliance Service to analyze mortgage loan data for compliance with consumer protection laws and institutionally mandated compliance policies. The companyÂ’s Encompass solutions and services also include Encompass Product and Pricing Service to compare loans offered by lenders and investors; Encompass Flood Service to order and transfer flood zone determination; Encompass CRM to manage contacts, leads, and marketing campaigns; Encompass 4506-T Service, an integrated income verification solution; Encompass Appraisal Central to order, track, and retrieve appraisal reports; and Encompass Fraud Service to order collateral and non-collateral based fraud risk reports. In addition, it offers Encompass Consumer Connect enables lenders to deliver an online loan origination experience for borrowers; Encompass TPO WebCenter for loan level interaction; Encompass TPO Connect, which provides a Web experience for wholesale and correspondent lending channels; and Encompass Loan Officer Connect used for loan officers. Further, the company offers research and reference, education, documentation, and data and analytics products under the AllRegs brand. Ellie Mae, Inc. was founded in 1997 and is headquartered in Pleasanton, California.