Numerex Corp. (NASDAQ: NMRX) and Westell Technologies (NASDAQ:WSTL) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Insider and Institutional Ownership

24.1% of Numerex Corp. shares are held by institutional investors. Comparatively, 27.2% of Westell Technologies shares are held by institutional investors. 14.1% of Numerex Corp. shares are held by company insiders. Comparatively, 24.2% of Westell Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Numerex Corp. and Westell Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Numerex Corp. 0 2 1 0 2.33
Westell Technologies 0 0 1 0 3.00

Numerex Corp. presently has a consensus price target of $5.33, suggesting a potential upside of 39.25%. Westell Technologies has a consensus price target of $6.00, suggesting a potential upside of 112.77%. Given Westell Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe Westell Technologies is more favorable than Numerex Corp..

Profitability

This table compares Numerex Corp. and Westell Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Numerex Corp. -31.83% -21.75% -12.54%
Westell Technologies -13.51% -1.07% -0.84%

Risk and Volatility

Numerex Corp. has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500. Comparatively, Westell Technologies has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500.

Valuation & Earnings

This table compares Numerex Corp. and Westell Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Numerex Corp. $65.36 million 1.15 -$944,999.00 ($1.07) -3.58
Westell Technologies $64.72 million 0.67 $217,999.00 ($0.56) -5.04

Westell Technologies has higher revenue, but lower earnings than Numerex Corp.. Westell Technologies is trading at a lower price-to-earnings ratio than Numerex Corp., indicating that it is currently the more affordable of the two stocks.

Summary

Westell Technologies beats Numerex Corp. on 10 of the 12 factors compared between the two stocks.

Numerex Corp. Company Profile

Numerex Corp. is a holding company. The Company, through its subsidiaries, provides managed enterprise solutions, which enable the Internet of Things (IoT). The Company offers solutions to incorporate the IoT building blocks, such as device, network, application and platform. Its technology encompasses a range of the IoT ecosystem and delivers solutions for enterprise users. It provides various enabling value-added services through the go-to-market process for its customers by simplifying the IoT implementation through its cloud-based and horizontal IoT platform. The Company offers its network services through cellular, satellite, broadband and wireline networks worldwide to transmit data. It offers Numerex platform, which combines IoT service enablement features with application framework to deploy solutions. The Company’s cellular networks include national and regional carriers, and consist of second generation (2G), third generation (3G) and fourth generation (4G) technologies.

Westell Technologies Company Profile

Westell Technologies, Inc. is a provider of in-building wireless, intelligent site management, cell site optimization and outside plant solutions. The Company’s set of products and solutions are designed to manage network performance for carriers, integrators and other network operators. The Company operates in two segments: In-Building Wireless (IBW) and Communication Solutions Group (CSG). The Company’s segments are engaged in the design, development, assembly, and marketing of a range of products and solutions. The IBW segment solutions include distributed antenna systems (DAS) conditioners, digital repeaters and bi-directional amplifiers (BDAs), and system components and antennas, all used by wireless service providers and third-party hosts to fine tune radio frequency (RF) signals. The Company’s intelligent site management solutions include a suite of remote monitoring and control devices.

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