Varonis Systems (NASDAQ: VRNS) and MAM Software Group (NASDAQ:MAMS) 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 valuation, profitabiliy, risk, analyst recommendations, institutional ownership, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Varonis Systems and MAM Software Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Varonis Systems 0 2 8 0 2.80
MAM Software Group 0 1 0 0 2.00

Varonis Systems presently has a consensus target price of $39.40, indicating a potential upside of 2.34%. MAM Software Group has a consensus target price of $6.00, indicating a potential downside of 12.02%. Given Varonis Systems’ stronger consensus rating and higher probable upside, research analysts plainly believe Varonis Systems is more favorable than MAM Software Group.

Institutional and Insider Ownership

61.4% of Varonis Systems shares are owned by institutional investors. Comparatively, 31.0% of MAM Software Group shares are owned by institutional investors. 19.5% of Varonis Systems shares are owned by insiders. Comparatively, 39.6% of MAM Software Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Varonis Systems and MAM Software Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Varonis Systems $174.37 million 6.01 -$13.63 million ($0.70) -55.00
MAM Software Group $31.72 million 2.64 $4.32 million $0.30 22.73

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

Volatility and Risk

Varonis Systems has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, MAM Software Group has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500.

Profitability

This table compares Varonis Systems and MAM Software Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Varonis Systems -10.46% -23.33% -11.06%
MAM Software Group 11.13% 59.94% 15.73%

Summary

Varonis Systems beats MAM Software Group on 7 of the 13 factors compared between the two stocks.

About Varonis Systems

Varonis Systems, Inc. provides a solutions that protect data from insider threats and cyberattacks. The Company’s products include DatAdvantage, DataPrivilege, Interface Data Unit Classification Framework, Data Transport Engine, DatAnywhere and DatAnswers. Its platform allows enterprises to analyze, secure, manage and migrate volumes of unstructured data. It specializes in file and e-mail systems that store valuable spreadsheets, word processing documents, presentations, audio and video files, e-mails and text. Its Metadata Framework is a technology platform that extracts metadata from an enterprise’s information technology (IT) infrastructure. Data often includes an enterprise’s financial information, intellectual property, and confidential employee, customer or patient records. IT and business personnel deploy its software for a range of use cases, including data security, governance and compliance, user behavior analytics, archiving, search, and file synchronization and sharing.

About MAM Software Group

MAM Software Group, Inc. (MAM) is a technology holding company. The Company is a provider of cloud-based business and on premise management solutions for the auto parts, tires and vertical distribution industries. Its segments include MAM UK and MAM NA. It operates through three subsidiaries: MAM Software, Inc. (MAM NA), MAM Software Limited (MAM Ltd.) and Origin Software Solutions Ltd. (Origin) (MAM Ltd. and Origin are collectively referred to as MAM UK). The Company provides software, information and related services to businesses engaged in the automotive aftermarket in the United States, Canada, the United Kingdom and Ireland. In the United Kingdom Market, it also provides management solutions to businesses involved in the wholesale of construction materials. Its products and services include business management systems, information products, online services, and customer support and consulting and training.

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