Smith Micro Software (SMSI) vs. Park City Group (PCYG) Financial Analysis

Smith Micro Software (NASDAQ: SMSI) and Park City Group (NASDAQ:PCYG) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Profitability

This table compares Smith Micro Software and Park City Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Smith Micro Software -49.33% -339.18% -49.92%
Park City Group 19.34% 10.25% 8.26%

Institutional and Insider Ownership

14.0% of Smith Micro Software shares are owned by institutional investors. Comparatively, 29.1% of Park City Group shares are owned by institutional investors. 22.0% of Smith Micro Software shares are owned by company insiders. Comparatively, 37.5% of Park City Group shares are owned by company 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.

Analyst Recommendations

This is a breakdown of current ratings for Smith Micro Software and Park City Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Smith Micro Software 0 0 0 0 N/A
Park City Group 0 0 3 0 3.00

Park City Group has a consensus target price of $16.50, indicating a potential upside of 33.60%. Given Park City Group’s higher probable upside, analysts plainly believe Park City Group is more favorable than Smith Micro Software.

Volatility and Risk

Smith Micro Software has a beta of 0.04, meaning that its share price is 96% less volatile than the S&P 500. Comparatively, Park City Group has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Valuation and Earnings

This table compares Smith Micro Software and Park City Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Smith Micro Software $25.00 million 0.64 -$9.65 million ($0.99) -1.13
Park City Group $17.55 million 13.66 $4.08 million $0.13 95.01

Park City Group has higher revenue, but lower earnings than Smith Micro Software. Smith Micro Software is trading at a lower price-to-earnings ratio than Park City Group, indicating that it is currently the more affordable of the two stocks.

Summary

Park City Group beats Smith Micro Software on 11 of the 12 factors compared between the two stocks.

Smith Micro Software Company Profile

Smith Micro Software, Inc. is a provider of software solutions. The Company operates through two segments: Wireless and Graphics. The Company offers multi-platform, modular solutions organized into three product families, including NetWise, CommSuite and QuickLink. For mobile network operators, NetWise helps reduce cellular congestion and optimize data traffic across third-generation (3G), fourth-generation (4G) and wireless fidelity (Wi-Fi) networks. Graphics segment includes its consumer-based products, such as Poser, Anime Studio, Manga Studio, MotionArtist and StuffIt. The Graphics segment develops a range of software, including graphic design and animation, compression and personal computer (PC)/Mac utilities, for consumers, professional artists and educators. The Company also offers Family Safety platform for family locator and parental controls.

Park City Group Company Profile

Park City Group, Inc. is a software-as-a-service (SaaS) provider. The Company delivers its services through software products designed, developed, marketed and supported by the Company. The Company also has a Professional Services business, which conducts customization, implementation and training. The Company has approximately two services groups, such as The Business Analytics Group and The Professional Services Group. The Business Analytics Group offers business-consulting services to suppliers and retailers in the grocery, convenience store and specialty retail industries. The Professional Services Group provides consulting services. The Company’s solutions include Advanced Commerce and Supply-Chain Solutions, and Food Safety Solutions. The Company’s primary advanced commerce and supply-chain solutions include Scan Based Trading, ScoreTracker, Vendor Managed Inventory, Store Level Replenishment, Enterprise Supply Chain Planning, Fresh Market Manager and ActionManager.

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