Financial Analysis: Magic Software Enterprises (NASDAQ:MGIC) and CCC Intelligent Solutions (NYSE:CCCS)

Magic Software Enterprises (NASDAQ:MGIC) and CCC Intelligent Solutions (NYSE:CCCS) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Insider and Institutional Ownership

24.7% of Magic Software Enterprises shares are owned by institutional investors. Comparatively, 95.8% of CCC Intelligent Solutions shares are owned by institutional investors. 4.5% of Magic Software Enterprises shares are owned by company insiders. Comparatively, 6.7% of CCC Intelligent Solutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Magic Software Enterprises and CCC Intelligent Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magic Software Enterprises	6.83%	16.36%	8.96%
CCC Intelligent Solutions	-10.85%	4.52%	2.71%

Valuation & Earnings

This table compares Magic Software Enterprises and CCC Intelligent Solutions’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magic Software Enterprises	$535.05 million	0.92	$37.03 million	$0.73	13.68
CCC Intelligent Solutions	$866.38 million	7.96	-$92.48 million	($0.21)	-52.86

Magic Software Enterprises has higher earnings, but lower revenue than CCC Intelligent Solutions. CCC Intelligent Solutions is trading at a lower price-to-earnings ratio than Magic Software Enterprises, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Magic Software Enterprises and CCC Intelligent Solutions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magic Software Enterprises	0	0	1	0	3.00
CCC Intelligent Solutions	0	3	5	0	2.63

Magic Software Enterprises presently has a consensus price target of $14.00, indicating a potential upside of 40.14%. CCC Intelligent Solutions has a consensus price target of $13.63, indicating a potential upside of 22.75%. Given Magic Software Enterprises’ stronger consensus rating and higher possible upside, analysts clearly believe Magic Software Enterprises is more favorable than CCC Intelligent Solutions.

Risk and Volatility

Magic Software Enterprises has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, CCC Intelligent Solutions has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Summary

Magic Software Enterprises beats CCC Intelligent Solutions on 8 of the 14 factors compared between the two stocks.

About Magic Software Enterprises

Magic Software Enterprises Ltd. provides proprietary application development, vertical software solutions, business process integration, information technologies (IT) outsourcing software services, and cloud based services in Israel and internationally. The company's Software Services segment develops, markets, sells, and supports application platform, software applications, and business and process integration solutions and related services. Its IT Professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental outsourcing services. It also offers proprietary application platforms, such as Magic xpa for developing and deploying business applications; AppBuilder for building, deploying, and maintaining business applications; Magic xpi for application integration; Magic xpi cloud native; FactoryEye for virtualization of production data; Magic Data Management and Analytics Platform for data management; and Magic SmartUX for cross-platform mobile business applications. It also provides vertical software solutions comprising Clicks, a software solution for healthcare providers; Leap, a software solution for business support systems; Hermes Cargo, a packaged software solution for managing air cargo ground handling; HR Pulse, a single-tenant software as a service tool; MBS Solution, a system for managing TV broadcast management; Nativ, a system for management of rehabilitation centers; and Mobisale, a system for sales and distribution field activities for consumer goods manufacturers and wholesalers. In addition, the company provides software maintenance, support, training, and consulting services. The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. The company was incorporated in 1983 and is headquartered in Or Yehuda, Israel.

About CCC Intelligent Solutions

CCC Intelligent Solutions Holdings Inc., operates as a software as a service company for the property and casualty insurance economy in the United States and China. The company's cloud-based software as a service platform connects trading partners, facilitates commerce, and supports mission-critical, artificial intelligence enabled digital workflow across the insurance economy, including insurers, repairers, automakers, parts suppliers, lenders and more. It offers CCC insurance solutions, including CCC workflow, CCC estimating, CCC total loss, CCC casualty, CCC subrogation, and CCC claim handling; CCC repair solutions, such as CCC network management, CCC repair workflow, and CCC repair quality; CCC other ecosystem solutions, which includes CCC parts solutions, CCC automotive manufacturer solutions, CCC diagnostics service provider solutions, and CCC payments; and CCC international solutions. The company was founded in 1980 and is headquartered in Chicago, Illinois.