Critical Survey: IBEX (NASDAQ:IBEX) versus Skillz (NYSE:SKLZ)

IBEX (NASDAQ:IBEX) and Skillz (NYSE:SKLZ) are both small-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares IBEX and Skillz’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
IBEX	6.57%	22.54%	12.38%
Skillz	-40.87%	-38.95%	-20.10%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for IBEX and Skillz, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IBEX	0	2	2	0	2.50
Skillz	0	1	1	0	2.50

IBEX presently has a consensus price target of $22.25, indicating a potential downside of 9.15%. Skillz has a consensus price target of $10.75, indicating a potential upside of 73.95%. Given Skillz’s higher possible upside, analysts clearly believe Skillz is more favorable than IBEX.

Institutional and Insider Ownership

81.2% of IBEX shares are held by institutional investors. Comparatively, 19.4% of Skillz shares are held by institutional investors. 6.7% of IBEX shares are held by company insiders. Comparatively, 30.4% of Skillz shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares IBEX and Skillz”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IBEX	$521.73 million	0.79	$33.65 million	$2.13	11.50
Skillz	$150.11 million	0.72	-$101.36 million	($2.25)	-2.75

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

Risk and Volatility

IBEX has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, Skillz has a beta of 2.74, meaning that its stock price is 174% more volatile than the S&P 500.

Summary

IBEX beats Skillz on 10 of the 13 factors compared between the two stocks.

About IBEX

IBEX Limited provides end-to-end technology-enabled customer lifecycle experience solutions in the United States and internationally. The company products and services portfolio includes ibex Connect, that offers customer service, technical support, revenue generation, and other revenue generation outsourced back-office services through the CX model, which integrates voice, email, chat, SMS, social media, and other communication applications; ibex Digital, a customer acquisition solution that comprises digital marketing, e-commerce technology, and platform solutions; and ibex CX, a customer experience solution, which provides a suite of proprietary software tools to measure, monitor, and manage its clients' customer experience. It operates customer engagement and customer acquisition delivery centers. The company serves banking and financial services, delivery and logistics, health tech and wellness, high tech, retail and e-commerce, streaming and entertainment, travel and hospitality, and utility industries. The company was formerly known as IBEX Holdings Limited and changed its name to IBEX Limited in September 2019. IBEX Limited was incorporated in 2017 and is headquartered in Washington, District of Columbia. The company is a subsidiary of The Resource Group International Limited.

About Skillz

Skillz Inc. operates a mobile game platform in the United States and internationally. The company primarily develops and supports a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity to end-users. The company distributes games through direct app download from its website, as well as through third-party platforms. Skillz Inc. was founded in 2012 and is based in San Francisco, California.