American Software (NASDAQ:AMSWA) and Smith Micro Software (NASDAQ:SMSI) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.
Valuation and Earnings
This table compares American Software and Smith Micro Software’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American Software||$115.47 million||4.36||$6.74 million||$0.26||60.62|
|Smith Micro Software||$43.35 million||4.26||$10.72 million||$0.23||19.39|
Smith Micro Software has lower revenue, but higher earnings than American Software. Smith Micro Software is trading at a lower price-to-earnings ratio than American Software, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
American Software has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Smith Micro Software has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.
This table compares American Software and Smith Micro Software’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Smith Micro Software||26.37%||30.81%||23.82%|
Insider and Institutional Ownership
76.9% of American Software shares are held by institutional investors. Comparatively, 21.7% of Smith Micro Software shares are held by institutional investors. 11.2% of American Software shares are held by company insiders. Comparatively, 17.6% of Smith Micro Software shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for American Software and Smith Micro Software, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Smith Micro Software||0||0||2||0||3.00|
American Software currently has a consensus target price of $22.00, indicating a potential upside of 39.59%. Smith Micro Software has a consensus target price of $6.25, indicating a potential upside of 40.13%. Given Smith Micro Software’s higher probable upside, analysts plainly believe Smith Micro Software is more favorable than American Software.
Smith Micro Software beats American Software on 8 of the 13 factors compared between the two stocks.
American Software Company Profile
American Software, Inc. develops, markets, and supports a portfolio of software and services worldwide. It operates in three segments: Supply Chain Management (SCM), Information Technology (IT) Consulting, and Other. The SCM segment provides supply chain management and retail planning solutions, including sales and operations planning, demand and inventory optimization, manufacturing planning and scheduling, supply optimization, retail allocation and merchandise planning, and transportation optimization solutions to streamline and optimize the forecasting, inventory, production scheduling, production, supply, allocation, distribution, and management of products between trading partners. This segment also offers cloud solutions for supply chain management, product lifecycle management, vendor quality, and vendor compliance and corporate social responsibility for brand retailers and manufacturers; and analytics and business intelligence solutions for the supply chain market. The IT Consulting segment offers IT staffing and consulting services, such as professional services/product management/project management, staff augmentation, and social media and analytic marketing, as well as cloud, collaboration, network, and security services for software enhancement, documentation, update, customer education, consulting, systems integration, maintenance, and other support services. The Other segment provides purchasing and materials management, customer order processing, financial, e-commerce, and traditional manufacturing solutions. The company markets its products through direct and indirect sales channels to retail, apparel, footwear, consumer packaged goods, chemicals, oil and gas, life sciences, telecommunications, consumer electronics, industrial products, and other manufacturing industries. American Software, Inc. was founded in 1970 and is headquartered in Atlanta, Georgia.
Smith Micro Software Company Profile
Smith Micro Software, Inc. develops and sells software to simplify and enhance the mobile experience to wireless service providers, device manufacturers, and enterprise businesses in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through two segments, Wireless and Graphics. The Wireless segment offers SafePath Family, real-time family location tracking app; CommSuite VVM, a Visual Voicemail directly to a mobile phone app and email; CommSuite VTT, Voice-to-Text transcription system; NetWise Optics, a mobile analytics solution; NetWise Passport, an automated user onboarding and Wi-Fi service provisioning solution; QuickLink IoT Services Platform, an end-to-end device management platform; and Captivate, a mobile marketing and Big Data platform. The Graphics segment develops various software products, including graphic design and animation, compression, and PC/Mac utilities for consumers, professional artists, and educators. This segment offers Poser, 3D rendering and animation software for photorealistic characters, art, illustration, and digital design; Moho, 2D animation program for creating movies, cartoons, anime, and cut out animations; MotionArtist, a solution for creating animatics and interactive presentations; and StuffIt Deluxe, a solution for documents and media. The company provides its products through direct sales on its Websites, as well as through affiliate Websites, resellers, and retail outlets. It also offers technical support and customer services. Smith Micro Software, Inc. was founded in 1982 and is headquartered in Aliso Viejo, California.
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