Critical Review: Vertex (NASDAQ:VERX) & Great Elm Group (NASDAQ:GEG)

Great Elm Group (NASDAQ:GEG) and Vertex (NASDAQ:VERX) are both multi-sector conglomerates companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Insider and Institutional Ownership

52.8% of Great Elm Group shares are owned by institutional investors. Comparatively, 70.3% of Vertex shares are owned by institutional investors. 51.8% of Great Elm Group shares are owned by insiders. Comparatively, 44.6% of Vertex shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Great Elm Group has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Vertex has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Great Elm Group and Vertex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Great Elm Group	-6.90%	-1.77%	-0.89%
Vertex	4.73%	24.92%	6.65%

Valuation and Earnings

This table compares Great Elm Group and Vertex”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Great Elm Group	$18.52 million	2.92	-$1.39 million	($0.05)	-36.40
Vertex	$643.23 million	12.97	-$13.09 million	$0.18	297.28

Great Elm Group has higher earnings, but lower revenue than Vertex. Great Elm Group is trading at a lower price-to-earnings ratio than Vertex, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Great Elm Group and Vertex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Great Elm Group	0	0	0	0	0.00
Vertex	0	3	7	1	2.82

Vertex has a consensus target price of $54.70, suggesting a potential upside of 2.22%. Given Vertex’s stronger consensus rating and higher possible upside, analysts plainly believe Vertex is more favorable than Great Elm Group.

Summary

Vertex beats Great Elm Group on 12 of the 15 factors compared between the two stocks.

About Great Elm Group

Great Elm Group, Inc. operates as a asset management company. The company engages in credit, real estate, and finance businesses. It is also involved in business development related activities and offers investment management services. The company was formerly known as Great Elm Capital Group, Inc. and changed its name to Great Elm Group, Inc. in December 2020. Great Elm Group, Inc. was incorporated in 1994 and is headquartered in Waltham, Massachusetts.

About Vertex

Vertex, Inc., together with its subsidiaries, provides enterprise tax technology solutions for retail trade, wholesale trade, and manufacturing industries in the United States and internationally. The company offers tax determination; compliance and reporting, including workflow management tools, role-based security, and event logging; tax data management; document management; analytics and insights; pre-built integration that includes mapping data fields, and business logic and configurations; industry-specific solutions; and technology specific solutions, such as chain flow accelerator and SAP-specific tools. It provides implementation services, such as configuration, data migration and implementation, and support and training; and managed services, including tax return preparation, filing and tax payment, and notice management. The company sells its software products through software licenses and software as a service subscription. Vertex, Inc. was founded in 1978 and is headquartered in King of Prussia, Pennsylvania.