Critical Survey: SpendSmart Networks (SSPC) and Kirkland’s (KIRK)

SpendSmart Networks (OTCMKTS:SSPC) and Kirkland’s (NASDAQ:KIRK) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Volatility & Risk

SpendSmart Networks has a beta of -0.15, indicating that its stock price is 115% less volatile than the S&P 500. Comparatively, Kirkland’s has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Earnings & Valuation

This table compares SpendSmart Networks and Kirkland’s’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SpendSmart Networks $5.79 million 0.04 -$3.32 million N/A N/A
Kirkland’s $634.12 million 0.26 $5.29 million $0.38 27.63

Kirkland’s has higher revenue and earnings than SpendSmart Networks.

Profitability

This table compares SpendSmart Networks and Kirkland’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SpendSmart Networks N/A N/A N/A
Kirkland’s 0.45% 3.61% 1.70%

Insider & Institutional Ownership

98.5% of Kirkland’s shares are held by institutional investors. 39.5% of SpendSmart Networks shares are held by insiders. Comparatively, 3.7% of Kirkland’s shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for SpendSmart Networks and Kirkland’s, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SpendSmart Networks 0 0 0 0 N/A
Kirkland’s 0 0 2 0 3.00

Kirkland’s has a consensus target price of $14.50, suggesting a potential upside of 38.10%. Given Kirkland’s’ higher probable upside, analysts clearly believe Kirkland’s is more favorable than SpendSmart Networks.

Summary

Kirkland’s beats SpendSmart Networks on 10 of the 11 factors compared between the two stocks.

About SpendSmart Networks

SpendSmart Networks, Inc., doing business as SMS Masterminds, provides proprietary loyalty systems, and a suite of digital engagement and marketing services to merchants. It delivers and manages loyalty platforms, such as merchant funded rewards, loyalty rewards tablets/kiosks, and proprietary rewards management systems; and mobile marketing technology, including text and email messaging, customer analytics and propensity marketing, patent pending automated engagement engine, and Text2Win sweepstakes features. The company also delivers and manages enterprise level loyalty and mobile marketing consulting comprising monthly hands on reviews by its Certified Masterminds, campaign creation and optimization, and localized support. In addition, it delivers and manages proprietary mobile-responsive Website building platform, which includes software allowing licensees and merchants to create and administer their Websites, audits of existing merchant Websites, and integration of social media streams and consumer reviews into Websites. The company was formerly known as The SpendSmart Payments Company, Inc. and changed its name to SpendSmart Networks, Inc. in June 2014. SpendSmart Networks, Inc. was founded in 2007 and is headquartered in San Luis Obispo, California.

About Kirkland’s

Kirkland's, Inc. operates as a specialty retailer of home décor in the United States. The company's stores provide various merchandise, including holiday décor, framed arts, furniture, ornamental wall décor, fragrance and accessories, mirrors, lamps, decorative accessories, textiles, housewares, gifts, artificial floral products, frames, clocks, and outdoor living items. Its stores also offer an assortment of holiday merchandise in seasonal periods, as well as items that are suitable for gift-giving. The company operates its stores under the Kirkland's, Kirkland's Home, Kirkland's Home Outlet, Kirkland's Outlet, and The Kirkland Collection names in various off-mall venues comprising power strip centers, lifestyle centers, outlet centers, and freestanding locations, as well as enclosed malls. As of March 16, 2018, it operated 420 stores in 36 states. The company also sells its products through its kirklands.com Website. Kirkland's, Inc. was founded in 1966 and is based in Brentwood, Tennessee.

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