Stratasys (NASDAQ: SSYS) and Radcom (NASDAQ:RDCM) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitabiliy, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

67.2% of Stratasys shares are held by institutional investors. Comparatively, 16.6% of Radcom shares are held by institutional investors. 4.3% of Stratasys shares are held by company insiders. Comparatively, 69.0% of Radcom shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Stratasys has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, Radcom has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Profitability

This table compares Stratasys and Radcom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stratasys -10.17% -0.03% -0.02%
Radcom 2.18% 2.70% 1.94%

Valuation and Earnings

This table compares Stratasys and Radcom’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stratasys $667.71 million 1.90 $28.83 million ($1.32) -18.20
Radcom $31.00 million 7.70 $351,500.00 $0.08 256.25

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

Analyst Ratings

This is a summary of recent ratings and target prices for Stratasys and Radcom, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stratasys 5 8 3 0 1.88
Radcom 0 0 2 0 3.00

Stratasys currently has a consensus price target of $24.09, indicating a potential upside of 0.25%. Radcom has a consensus price target of $27.00, indicating a potential upside of 31.71%. Given Radcom’s stronger consensus rating and higher possible upside, analysts plainly believe Radcom is more favorable than Stratasys.

Summary

Radcom beats Stratasys on 9 of the 13 factors compared between the two stocks.

Stratasys Company Profile

Stratasys, Inc. is a manufacturer of three-dimensional (3D) printers and rapid prototyping (RP) systems for the office-based RP and direct digital manufacturing (DDM) markets. The Company develops, manufactures and sells a product line of 3D printers and DDM systems (and related consumable materials) that create physical models from computer-aided design (CAD) designs. It also offer rapid prototyping and production part manufacturing services through its centers located in North America, Europe and Australia. In January 2009, the Company introduced the uPrint Personal 3D Printer. In January 2009, it began offering a thermoplastic for direct digital manufacturing and rapid prototyping called ULTEM 9085.

Radcom Company Profile

RADCOM Ltd. (RADCOM) provides service assurance and customer experience management solutions for communication service providers (CSPs). The Company provides solutions for networks, including long-term evolution (LTE), LTE Advanced (LTE-A), voice over LTE (VoLTE), Internet protocol multimedia subsystem (IMS), Voice over Internet protocol (VoIP), universal mobile telecommunications system (UMTS) or global system for mobile communications (GSM) and mobile broadband. Its software-based solutions enable CSPs to manage both existing networks and network functions virtualization (NFV) based architectures. Its products and solutions include The MaveriQ Solution for Service Assurance and customer experience management (CEM). The MaveriQ solution is a probe-based customer and service assurance solution designed to enable CSPs to carry out end-to-end voice and data quality monitoring and to manage their networks and services. The MaveriQ solution offers analysis and troubleshooting tools.

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