FRONTEO (FTEO) vs. Computer Services (CSVI) Critical Analysis

FRONTEO (NASDAQ:FTEO) and Computer Services (OTCMKTS:CSVI) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Analyst Recommendations

This is a summary of recent recommendations and price targets for FRONTEO and Computer Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FRONTEO 0 0 1 0 3.00
Computer Services 0 0 0 0 N/A

FRONTEO currently has a consensus price target of $23.00, indicating a potential upside of 57.53%. Given FRONTEO’s higher probable upside, research analysts clearly believe FRONTEO is more favorable than Computer Services.

Volatility and Risk

FRONTEO has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Computer Services has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500.

Dividends

Computer Services pays an annual dividend of $1.44 per share and has a dividend yield of 2.7%. FRONTEO does not pay a dividend.

Insider & Institutional Ownership

0.8% of Computer Services shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares FRONTEO and Computer Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FRONTEO -0.85% 9.35% 2.83%
Computer Services N/A N/A N/A

Earnings & Valuation

This table compares FRONTEO and Computer Services’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FRONTEO $111.36 million 2.50 -$6.25 million N/A N/A
Computer Services $249.56 million 2.94 $38.83 million N/A N/A

Computer Services has higher revenue and earnings than FRONTEO.

About FRONTEO

FRONTEO, Inc. provides Asian-language eDiscovery solutions and services primarily in the United States, Europe, and Asia. The company operates in two segments, Legal Tech Services and Artificial Intelligence (AI) Solutions Services. It has eDiscovery and forensic information documented in Japanese, Korean, Chinese, and English. The company assists clients involved in cross-border litigation, administrative proceedings, and internal investigations, including those related to antitrust investigations, intellectual property litigation, the Foreign Corrupt Practices Act, and product liability investigations. It also provides Lit i View, an online eDiscovery software, which handles Asian-language characters, encoding schemes, and native file systems; and Intelligence Cloud solution to maintain client data during and after a particular litigation or investigation, and data and documents in a relational database of its clients' data and documents. In addition, the company offers electronic data forensic investigation solutions and services that enables the preservation, analysis, processing, and production of electronically stored information in connection with fraud and corporate information leakage; forensic tools; and Lit i View XAMINER, a digital forensic software, and other related hardware and software products. Further, it helps to create document management procedures; conduct corporate risk audits; and comply with legal requirements to provide information to stakeholders. Additionally, the company provides AI solutions in the fields of business intelligence, healthcare, and digital communications. It serves enterprises, government agencies, law firms, and other organizations under the FRONTEO, KIBIT, and Landscaping brands. The company was formerly known as UBIC, Inc. and changed its name to FRONTEO, Inc. in July 2016. FRONTEO, Inc. was founded in 2003 and is headquartered in Tokyo, Japan.

About Computer Services

Computer Services, Inc., together with its subsidiaries, delivers core processing, managed services, mobile and Internet, payments processing, print and electronic distribution, and regulatory compliance solutions to financial institutions and corporate entities in the United States. It provides processing, maintenance, and support services; software licensing and installation services; professional services; and eBusiness services, as well as equipment and supply sales. The company also offers integrated banking solutions, which include check imaging; cash management; branch and merchant capture; print and mail, and online document delivery services; corporate intranets; secure Web hosting; e-messaging; teller and platform services; ATM and debit card service and support; payments solutions; risk assessment; network management; cloud-based managed services; and compliance software and services for regulatory compliance, homeland security, and fraud prevention. It provides its products and services to community banks, regional banks, and multi-bank holding companies, as well as to various other business enterprises. The company was incorporated in 1965 and is headquartered in Paducah, Kentucky.

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