Financial Analysis: Interlink Electronics (LINK) versus RADCOM (RDCM)

Interlink Electronics (NASDAQ:LINK) and RADCOM (NASDAQ:RDCM) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Analyst Ratings

This is a summary of recent recommendations and price targets for Interlink Electronics and RADCOM, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Interlink Electronics 0 0 0 0 N/A
RADCOM 0 0 2 0 3.00

RADCOM has a consensus price target of $12.00, suggesting a potential upside of 47.60%. Given RADCOM’s higher possible upside, analysts clearly believe RADCOM is more favorable than Interlink Electronics.

Institutional & Insider Ownership

0.4% of Interlink Electronics shares are owned by institutional investors. Comparatively, 25.4% of RADCOM shares are owned by institutional investors. 73.8% of Interlink Electronics shares are owned by insiders. Comparatively, 69.0% of RADCOM shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Interlink Electronics has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, RADCOM has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500.

Valuation & Earnings

This table compares Interlink Electronics and RADCOM’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Interlink Electronics $11.15 million 1.76 $1.26 million N/A N/A
RADCOM $37.23 million 2.95 $2.90 million $0.23 35.35

RADCOM has higher revenue and earnings than Interlink Electronics.

Profitability

This table compares Interlink Electronics and RADCOM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Interlink Electronics 5.99% 7.39% 6.93%
RADCOM 9.76% 4.99% 4.30%

Summary

RADCOM beats Interlink Electronics on 9 of the 12 factors compared between the two stocks.

Interlink Electronics Company Profile

Interlink Electronics, Inc., together with its subsidiaries, designs, develops, manufactures, and sells force-sensing technologies that incorporate proprietary materials technology, and firmware and software products and custom solutions. Its products comprise sensor components, subassemblies, and modules that support cursor control and novel three dimensional user inputs. The company also provides FSR sensors; force sensing linear potentiometers for menu navigation and control; and integrated mouse modules and pointing solutions to various electronic devices. In addition, it offers human machine interface solutions that have various applications, including vehicle entry, vehicle multi-media control interface, rugged touch controls, presence detection, collision detection, speed and torque controls, biological monitoring, and others. The company serves Fortune 500 companies, start-ups, design houses, original design manufacturers, original equipment manufacturers, and universities in various markets, such as consumer electronics, automotive, industrial, and medical through direct sales employees, as well as outside sales representatives and distributors. It operates in the United States, Asia and Middle East, Europe, and internationally. Interlink Electronics, Inc. was founded in 1985 and is headquartered in Westlake Village, California.

RADCOM Company Profile

RADCOM Ltd. provides service assurance and customer experience management solutions for communication service providers (CSPs). Its carrier-grade solutions support mobile and fixed networks, and scale to terabit data bandwidths to enable data analytics. The company offers solutions for virtualized infrastructure and next-generation networks. Its product line includes the MaveriQ, a next-generation probe-based customer and service assurance solution that enables CSPs to carry out end-to-end voice and data quality monitoring, manage their networks and services, and monitor their roaming and interconnect traffic. The company's MaveriQ solution also provides service assurance monitoring applications, including network troubleshooting and quality monitoring, service quality monitoring, customer experience management, customer quality of service monitoring, and customer service level agreements monitoring. In addition, it offers Network Visibility, an automated network function virtualization orchestration solution for onboarding and configuration that enables traffic distribution, load balancing, and end-to-end visibility across virtual networks, as well as provides packet broker capabilities, like packet de-duplication, secure socket layer decryption, and packet slicing. Further, it provides Network Insights, which offers CSPs with full network visibility that allows them to locate and resolve any performance issues. The company sells its products directly, as well as through a network of independent distributors and resellers, and independent representatives worldwide. The company was formerly known as Big Blue Catalogue Ltd. and changed its name to RADCOM Ltd. in 1989. RADCOM Ltd. was founded in 1985 and is headquartered in Tel Aviv, Israel.

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