SoundThinking (NASDAQ:SSTI – Get Free Report) and Virnetx (NASDAQ:VHC – Get Free Report) are both small-cap technology companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.
Profitability
This table compares SoundThinking and Virnetx’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SoundThinking | -16.92% | -23.77% | -12.90% |
| Virnetx | N/A | -92.46% | -66.74% |
Volatility and Risk
SoundThinking has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Virnetx has a beta of 2.28, suggesting that its share price is 128% more volatile than the S&P 500.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SoundThinking | $104.13 million | 0.69 | -$9.42 million | ($1.29) | -4.33 |
| Virnetx | $160,000.00 | 314.25 | -$18.23 million | ($5.37) | -2.23 |
SoundThinking has higher revenue and earnings than Virnetx. SoundThinking is trading at a lower price-to-earnings ratio than Virnetx, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for SoundThinking and Virnetx, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SoundThinking | 1 | 5 | 1 | 0 | 2.00 |
| Virnetx | 1 | 0 | 0 | 0 | 1.00 |
SoundThinking currently has a consensus target price of $10.83, suggesting a potential upside of 94.15%. Given SoundThinking’s stronger consensus rating and higher possible upside, research analysts plainly believe SoundThinking is more favorable than Virnetx.
Insider and Institutional Ownership
60.7% of SoundThinking shares are held by institutional investors. Comparatively, 10.4% of Virnetx shares are held by institutional investors. 10.9% of SoundThinking shares are held by company insiders. Comparatively, 15.7% of Virnetx shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Summary
SoundThinking beats Virnetx on 9 of the 14 factors compared between the two stocks.
About SoundThinking
SoundThinking, Inc., a public safety technology company that provides transformative solutions and strategic advisory services for law enforcement and civic leadership. Its SafetySmart Platform, an integrated suite of data-driven tools that enable law enforcement and community violence prevention and health organizations to be efficient in public safety outcomes. It offers ShotSpotter, an acoustic gunshot detection system; CrimeTracer, a law enforcement search engine; CaseBuilder, an investigation management system; and ResourceRouter, a software that directs patrol and community anti-violence resources to help maximize their impact. The company sells its solutions through its direct sales teams. The company was formerly known as ShotSpotter, Inc. and changed its name to SoundThinking, Inc. in April 2023. SoundThinking, Inc. was founded in 1996 and is headquartered in Fremont, California.
About Virnetx
VirnetX Holding Corporation, through its subsidiary VirnetX, Inc., operates as an Internet security software and technology company primarily in the United States. The company develops software and technology solutions, including secure domain name registry and GABRIEL Connection Technology that are designed to secure communications over the Internet using zero trust network access. It also offers a portfolio of licenses and services, such as VirnetX One, a security-as-a-service platform that protects enterprise applications, services, and infrastructure from cyber-attacks; GABRIEL Connection Technology software development kit to assist with rapid integration of its techniques into existing software implementations; and War Room software that offers safe and secure video conferencing meeting environment where sensitive communications and data is invisible to those not authorized to view it. In addition, the company provides GABRIEL Collaboration Suite that enables seamless and secure cross-platform communications between users’ devices. It serves domain infrastructure and communication service providers, and system integrators; and enterprise customers, developers, and original equipment manufacturers of chips, servers, desktops, smart phones, tablets, laptops, net books, and other devices in the IP-telephony, mobility, fixed-mobile convergence, and unified communications markets. The company was incorporated in 2005 and is headquartered in Zephyr Cove, Nevada.
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