Financial Analysis: Radcom (RDCM) versus Stratasys (SSYS)

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

Insider & Institutional Ownership

18.2% of Radcom shares are owned by institutional investors. Comparatively, 67.3% of Stratasys shares are owned by institutional investors. 69.0% of Radcom shares are owned by company insiders. Comparatively, 4.3% of Stratasys shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Radcom has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Stratasys has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Radcom and Stratasys, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Radcom 0 0 2 0 3.00
Stratasys 5 9 4 0 1.94

Radcom currently has a consensus target price of $27.00, suggesting a potential upside of 43.24%. Stratasys has a consensus target price of $24.21, suggesting a potential upside of 15.58%. Given Radcom’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Radcom is more favorable than Stratasys.

Profitability

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

Net Margins Return on Equity Return on Assets
Radcom -3.90% -2.19% -1.64%
Stratasys -8.33% 0.29% 0.24%

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Radcom $32.72 million 6.74 -$1.14 million ($0.11) -171.36
Stratasys $665.63 million 1.66 $30.05 million ($1.07) -19.58

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

Summary

Radcom beats Stratasys on 7 of the 13 factors compared between the two stocks.

About Radcom

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.

About Stratasys

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.

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